Friday, August 22, 2008

HubSpot handles e-marketing surge

By Christopher Calnan

Internet marketing startup HubSpot Inc. is seeing a spike in business as its small and midsize business customers ramp up efforts to use the Internet to generate sales leads.

Cambridge’s HubSpot, founded in 2006, is reporting a growth spurt that CEO Brian Halligan said is due to businesses and marketers coming to the realization that Internet-based strategies can drum up clients. Since May, the number of customers has surged from nearly 400 to 600, Halligan said.

“There’s been a shift in the marketing economy,” he said. “People are starting to figure it out.”

HubSpot develops a suite of online sales and marketing tools. Its software-as-a-service product for small businesses is available for $250 a month. For professional marketers and midsize businesses, it developed a version with tools that track the source of links for $750 a month, Halligan said.

Several local tech companies are in the online marketing business, including Waltham-based Constant Contact Inc., which completed an initial public offering last year, and Waltham neighbor iMakeNews Inc.

Last week, New York-based eMarketer Inc. reported that U.S. online advertising revenue is projected to reach $24.9 billion this year, a 17.4 percent increase over last year.

HubSpot was self-funded by Halligan and Dharmesh Shah, who met while attending the MIT Sloan School of Management.

In May, the company completed a $12 million Series B round, bringing its total funding to $17 million. Investors include Matrix Partners, which operates an office in Waltham, and General Catalyst Partners in Cambridge.