Jan Rezab

Getting social with Socialbakers

February 18, 2014: 10:29 AM ET

Fortune meets with CEO Jan Rezab on the morning that his Czech social analytics company raises $26 million.

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FORTUNE -- Jan Rezab takes a sip of his tea and wrinkles his nose. "This isn't right," he mutters. "This isn't English breakfast."

"Maybe it just hasn't steeped enough yet," a colleague offers. Rezab sets it down, sighs, and bounces his knee impatiently.

It's a quiet winter's morning in Manhattan's Meatpacking district, where snowflakes are piling into modest drifts created by the yellow taxi cabs as they roll by on slippery cobblestone streets. Rezab, the chief executive of the Prague-based social analytics company Socialbakers, has just flown across the Atlantic for New York's Social Media Week, where he will be glad-handing with technologists and delivering a speech about how companies can use social media channels to compete with each other for customers.

Before his week's schedule overtakes him -- tea or not, Rezab will need all the caffeine he can get -- he has retreated to The Standard Grill, mostly empty at this early hour, for scrambled eggs and toast. He thumbs through his phone's inbox with anxiety. It's understandable: In four minutes, his company will announce that it has raised $26 million in a Series C funding round led by Index Ventures, bringing the company's total raised to $34.3 million. It's one of the largest hauls by a non-U.S. "social" company to date and a staggering sum for a technology that many businesses just a few years ago thought was a novelty at best.

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"It used to be, 'Let's get some fans and we'll see how it pans out,'" he says. "That's not R.O.I., that's R.O.-ego. It all starts with reach and engagement, specifically on the post level." Which happens to be one of the things his company measures.

Since its founding in Prague in late 2008, Socialbakers has grown from four founders to 250 employees and attracted high-profile clients like Samsung, LVMH, Diageo, and Johnson & Johnson. In addition to its headquarters in the Czech Republic, the company has offices in Singapore, Paris, New York, and Munich, and claims to have grown revenue 300% in 2013.

"Social media is evolving. It's not enough to just manage it," Rezab says. "That's why we focus on competitive analytics -- how you're performing versus the entire category. 'Okay, every day, I'm reaching 40 million people using social media, and 100,000 are interacting with me on a daily basis.' That's why half the world's airlines use us. They do make money on social media -- for customer service."

Rezab says the millions will go toward international expansion and "building and improving the product around its core capabilities." Though he won't rule out the possibility that Socialbakers could be acquired by another company, as was the fate of the first wave of social analytics companies, he bristles at the notion that industry stalwarts like Adobe (ADBE), IBM (IBM), and Oracle (ORCL) have comparable expertise in the creation of genuinely deep social insights for businesses.

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"Social media has changed the expectation of the user; people expect a response right away," he says. "You used to wait 30 days for a letter! Now you expect something in 30 minutes on the company's Facebook page. It connected people to brands in a better and faster way. Brands are coming to accept the dialogue. So we can present to people on a board [of directors] the top 10 problems a company is having. It's much easier to organize this than from letters or call centers. You categorize problems and you give the board of a company a view on that. They have a list."

Index Ventures partner Jan Hammer says he backed Rezab and company because online marketing has fundamentally changed. "Customers interact differently," Hammer says. "You need a holistic approach to the category, which Socialbakers has. They've taken the thesis that everything will become digital and ultimately social. That's the underlying everything that a brand will do. The brand's job is the same -- find customers, sell to them, retain them, nurture more. The customer is the same person. What they are doing is equipping the brand to live in the new environment."

Back at breakfast, the news has finally hit the wires, and the e-mail is already rushing in. "Look at that," Rezab says, pushing aside his plate of eggs and thumbing across the display of his phone. "One hundred fifty new e-mails in the last four minutes." And hundreds of mentions on social media channels, of course.

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Outside, the density of falling snow has thinned, and the chalky country drifts have begun to collapse into a brown urban slurry. "It's going to rain," Rezab says, frowning as he fastens the buttons on his overcoat. Not exactly the best forecast for a jam-packed Social Media Week.

"As a business, social is getting bigger," he says. "It's a market that's not penetrated fully. It's still uncharted space." He glances at his phone and chuckles. "I think I'm the only person who hasn't tweeted out the news." And with that, Rezab steps out onto the sidewalk and toward the soft white horizon.

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