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Venture trio invests $165m in HootSuite

The investment in social media business HootSuite on behalf of OMERS Ventures, Insight Venture Partners and Accel Partners represents the largest-ever Canadian venture capital investment in a software company.

OMERS Ventures, Insight Venture Partners and Accel Partners have invested $165 million in social media management business HootSuite, an existing OMERS Ventures portfolio company.

OMERS Ventures first invested C$20 million (€15 million; $20 million) in HootSuite in 2012 via a secondary purchase from the company’s shareholders. Vancouver-based HootSuite provides a web-based social media platform that companies use to execute social media campaigns across multiple social networks. The company’s customers include Pepsi, Sony and Virgin. 

The investment from OMERS, Insight and Accel represents the largest-ever Canadian venture capital investment in a software company, according to a statement. 

“In 2012, OMERS Ventures invested in HootSuite because we believed in the integration of social media within the enterprise,” OMERS Ventures cheif executive officer John Ruffolo said in the statement. “Since then, HootSuite has shown the market that this trend is not only important, but mission critical for any company looking to be relevant.”

Accel Partners, which invested $12.7 million in Facebook in 2005 and held an 11.3 percent stake prior to its public offering, focuses on technology companies and has backed tech businesses in Europe, including music streaming site Spotify, taxi app Hailo and short-term lender Wonga.

“[W]e have long believed in the inevitable relevance of social networks and social media at the consumer level,” managing partner at Accel Partners Ryan Sweeney said in the statement. “What’s become apparent is that social channels are also becoming the manner in which small businesses through the Fortune 500 are opting to communicate with their customers and target markets.”

Insight Venture Partners focuses on the software, ecommerce and internet and data-service industries and held a final close for its Fund VIII on about $2.57 billion after roughly three months in market. Fund VIII reached its $2.4 billion target before receiving additional commitments from a group of smaller investors that brought the fund to its $2.57 billion hard-cap, Insight co-founder and managing director Jeff Horing told Private Equity International in a previous interview. 

OMERS Ventures officially launched in October 2011. The group invests between C$500,000 to C$30 million per transaction in sectors including technology, media, telecommunications, clean tech and life sciences. It will invest only in North America. 

OMERS Ventures, Insight Venture Partners and Accel Partners were unavailable for comment at press time.