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Investors line up for social media mining startup LeadSift

QUENTIN CASEY | Dec 3, 2012 8:55 AM ET
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LeadSift CEO Tapajyoti Das and his co-founders and staff are w orking on softw are that sorts through social media to find useful content.

Sandor Fizli f or National Post

Its been a crazy four months for Tapajyoti Das. He and his fellow LeadSift co-founders have been working 80 hours a week, scrambling to complete their ever-growing list of tasks. Among the most pressing are finishing and launching a trial version of their promising social media software, and signing shareholder agreements with some of Canadas top technology investors. Plus, Mr. Das is trying to complete his masters degree in computer science at Dalhousie University. His startup is the new darling of the East Coast tech sector, but Mr. Das is still determined to finish his degree in the next few months. My mom is going to kill me if I dont finish. So I have to do it, said the 29-year-old India-born entrepreneur, who moved from Calcutta to Halifax in 2002. Shell probably fly here and tell me to stop the business so I can finish my degree, he added with a laugh. That, of course, is not an option at this point. LeadSift is now backed by A-list tech investors, is being sought out by companies from around the world, and seems likely to produce the next Atlantic Canadian mega-exit.
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Last week, Mr. Das announced the impressive results of his companys equity financing efforts. The startup has secured $1.1-million, including $500,000 from OMERS Ventures. Smaller amounts were received from a host of angel investors, including Gerry Pond Canadas angel of the year in 2011 and Jevon MacDonald, whose Halifax startup, GoInstant, was recently purchased for $70million.

what has investors so excited? The answer is LeadSifts software, which mines social media data mainly from Twitter to generate sales leads for companies
Back in September, Mr. Das and his three co-founders were ready to cap their funding round at $500,000. Then they attended (and won) Halifaxs MentorCamp competition. The event brought dozens of international angels to Halifax many of whom asked to join LeadSifts equity round. I did not think those big names would invest and believe in us, but they did, said Mr. Das, the companys CEO. We actually had to say no to quite a few people. It was a good problem to have but it was very stressful. So what has investors so excited? The answer is LeadSifts software, which mines social media data mainly from Twitter to generate sales leads for companies. LeadSift recently launched a trial version of its software, which it hopes to test with up to 20 companies. A revised and de-bugged version is expected early in 2013. Mr. Das said companies from around the globe are asking to sign up, despite the fact that LeadSift has not advertised. Clearly expectations are high, but Mr. Das is quick to acknowledge that nothing has been proven yet. Somebody told me: Congratulating someone on raising money is like congratulating a chef on gathering the ingredients, he said. I totally agree with that. When people congratulate me on raising money, I say: Hold on until we build the product and the business. Thats where we are now: the execution phase. As Ian Cavanagh sees it, LeadSift must determine how many of its social mediagenerated leads actually result in sales for its users. In other words, the company must show its technology is ferreting out high probability leads. If they can prove that, then this is going to be very, very substantial, said Mr. Cavanagh, an early LeadSift investor and the chief executive of Ambir, a Maritime IT consulting company. What company should LeadSift seek to emulate? Mr. Cavanagh pointed to Radian6, the Fredericton social media monitoring company purchased last year by Salesforce.com for $326-million in cash and stock. Thats a bold goal, especially for a company formed less than a year ago. Based in Halifax, LeadSift was incorporated in April by Mr. Das and three other international students. Mr. Das and Sreejata Chatterjee hail from Calcutta (they were childhood friends), Hatem Nassrat is from Egypt, and Daniel Allen arrived from the Bahamas. The foursome accelerated their progress by participating in Launch36, a New Brunswick-based incubator for tech companies. And their list of accomplishments has only grown since exiting that program in June. In early November, LeadSift won a data analytics challenge at Ad:Tech New York, a major digital marketing event. The win didnt come with a cheque, but brought an invitation to work with General Electric on boosting that companys sales through social media leads. And in October, LeadSift signed a 50-50 revenue sharing agreement with Salesforce, the San Francisco-based cloud computing company. The deal is already generating cash for LeadSift.
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Just how quickly has LeadSift progressed? Well, the companys server was only recently relocated from Mr. Nassrats bedroom to a proper co-location space in the United States. Its staggering to consider their progress. They went from a bunch of computer science kids with a great idea to signing a partnership with Salesforce, said Shawn Carver, a New Brunswick-based tech startup specialist who has advised the LeadSift founders over the past year. (The founders recently thanked him with an equity stake). Theres just something special about this team, Mr. Carver said. Theyre going to turn this company into the next regional success story. You can feel the momentum building. Armed with cash and a long list of influential advisors, Mr. Das is bullish on his companys prospects. We have competition. But with these investors and mentors on board, we are more confident about crushing them, he said. But does he predict similar success in completing his masters degree? Thats the hope, but I highly doubt, he said with a laugh. My mom will not be happy.

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