The funding agreement requires the startup to find six new hires and ensures that the company remains in San Antonio for a minimum of three years.
Though the City’s investment is relatively small compared to the amount of capital required to scale up operations, it helps keep the company here, said HelpSocial CEO and Co-founder Matt Wilbanks.
“We want to stay in San Antonio and be a part of everything that’s happening,” Wilbanks said. “It’s really cool to see the city get involved like this and help grow the ecosystem.”
The grant will go through the San Antonio Economic Development Corporation (EDC), a part of the Economic Development Department that allows the City to invest funds in economic development projects.
EDC Executive Director Ed Davis told the Rivard Report Thursday that the corporation’s goal is to invest in companies that are innovating and growing in San Antonio.
“We’ve wanted to do something with the IT industry for some time now,” Davis explained. “HelpSocial is a company with a local CEO, it’s about local entrepreneurship, local funding, and it’s generating sales and revenue.”
HelpSocial was started a few years ago by a group of customer service employees at Rackspace, who developed software that integrates social media into existing customer service networks. Wilbanks explained that the product makes customer service more efficient.
“We help large consumer brands provide customer service over social networks,” he said. “So, (customers) can log into a dashboard and see who’s talking about them and match those with internal customer records so they can track conversations. We also provide social integration technology, where they can take features and plug them into their existing customer service systems.”
Anyone who has ever complained about a company over a social media platform and had that company respond quickly may have experienced HelpSocial’s work.
“For example, a large consumer brand may have a large following on Twitter and a call center where they’re handling the bulk of their customer service work,” Wilbanks said. “An easy way to scale that would be to take features from our web app and embed those into tools that their call center agents are already using. They’d be able to handle tweets just like phone calls.”
When the team that built the software wanted to expand the way they used it, and after they got a few bids from other companies interested in purchasing the product, the team negotiated with Rackspace to let them start their own company.
It took a lot of convincing, Wilbanks said.
“We were one of the first groups where we were taking intellectual property that was being used for Rackspace and taking it out of the company,” he said. Several companies have emerged out of Rackspace employees since it was founded in San Antonio in 1998. “They were never going to be in the business of selling a social media product. So it made sense to spin this out. And they’re still a customer of ours.”
Two years on, the company is in the middle of another round of fundraising. Including the $100,000 from the EDC, HelpSocial has raised $2.4 million, mostly from private investors. The EDC money will go directly towards hiring more people and allow them to stay in San Antonio, Wilbanks said.
“We’ve spent the last two years proving the model,” he said. “So we need to grow. It lines up really well with the City, because the City wants to see the startup community grow and flourish.”
Davis said that the City is just like any other investor, but with a local twist.
“Like anyone else, we look at the management team, the business plan, the market, and other factors,” Davis said. “But the whole aspect of our investment is to help spur local innovation. It has to involve local job creation and retention.”
Top image: The HelpSocial office in Geekdom. Photo by Kathryn Boyd-Batstone.