Luxembourg-based social analytics platform TalkWalker has raised €5 million in mezzanine financing from Main Mezzanine Capital, part of The Hague’s Main Capital Partners, at an undisclosed valuation. The company plans to use the money to further develop its main product and “significantly expand” its sales teams in Europe and the US.
Processing 500 million social media posts daily
Founded in 2009, TalkWalker is a social media analytics and monitoring platform. The company claims to “monitor and analyze online conversations on social networks, news websites, blogs, forums and more, in over 187 languages” by processing 500 million posts daily. TalkWalker’s A.I.-powered platform analyzes both visuals and text on social media and provides users with a dashboard, as well as API for integration with other tools. It’s aimed at businesses of different sizes, with pricing tiers ranging from €500 to €2,200 per month.
Major corporates among its 600+ clients
With this new round of financing TalkWalker has now raised a total of €8 million in funding. The fast-growing company currently employs a total of more than 100 people and has more than 600 clients. These include some major corporates like Microsoft and HP Enterprise and global agencies such as Ogilvy and Edelman. In a recent press release, TalkWalker stated it has been doubling in size and revenues yearly for four consecutive years. Expansion into the US market has been TalkWalker’s goal since 2015 when it opened its first office in New York City, which now employs 15 people.
“Excellent personal and strategic fit”
Although startups often raise local funding to fuel expansion in certain markets, the Luxembourg-based company has decided to go for a European fund. The spokesperson for TalkWalker explained that the company “had an excellent personal and strategic fit with Main Capital,” which is “also very well connected in Europe as well as in the US.” As the name suggests, Main Mezzanine Capital specializes in providing mezzanine loans to growing companies in the software and TMT (telecommunications, media, and technology) sectors in Benelux and Germany. Its recent investments include deals with TravelBird and OnGuard in the second half of 2016. “Main Mezzanine provides funding to companies with proven success, good management and sufficient growth potential,” Main Mezzanine CEO Lars van ‘t Hoenderdaal explains.
Mezzanine Loans: Similar to Convertible notes, yet notably different
The idea of a mezzanine loan, which sits somewhere in between equity financing and normal debt, is similar to that of convertible note, which is popular in the VC industry. It can be converted into an ownership or equity interest in case the company goes bust; however, being a subordinated loan, it ranks after venture capital and normal bank loans. According to Investopedia, a typical interest rate for mezzanine funding ranges from 12 to 20 percent.