5 Budding Social Data Startups to Watch

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By Kurt Wagner2013-12-05 23:00:17 UTC

It's still unclear exactly how Apple plans to use Topsy, the social media analytics firm the tech giant acquired on Monday for a reported $200 million. The possible theories are intriguing and numerous; speculation includes improvements to Siri, building social integration into Apple TV, and even the creation of an Apple search engine to rival Google on mobile devices.

Regardless of Apple's motivation, though, other companies that make money by analyzing social data such as public posts and tweets are taking away a major positive from the news: validation.

See also: 10 Hot Social Networks to Watch

"The [Topsy] acquisition was a huge market validator," said DataSift CEO Rob Bailey, whose social data analysis firm announced a $42 million funding round on Tuesday. "You just had a $500 billion company go all in on social."

Dozens of startups are trying to make sense of the millions of social media interactions that take place each day. Brands are using social data to monitor advertising campaigns, identify new customers and engage with existing customers. It's up to startups like DataSift and Topsy to provide the software and tools necessary to filter through these posts.

Katherine Barr, general partner at Mohr Davidow Ventures, has invested in numerous big data startups and believes that many companies are beginning to build their own social data tools. That means startups like DataSift, which focus exclusively on social data, may soon go out of business.

"There's a window of time for the social data provider companies and their time is right now," Barr said."I think there will be a time limit as well as a cap in some cases as to how big and valuable many of those companies can actually get."

It's safe to assume Topsy won't be the last social data company scooped up in the next six to 24 months. Here are a few other startups to keep an eye on.

1. 140 Proof

San Francisco-based 140 Proof has created what it calls a Blended Interest Graph, a tool that targets consumers based on their social media posts and helps advertisers reach the appropriate audience. The company works with thousands of advertisers, including big names like Kraft, Chevy and Microsoft, to surface ads on the web and on mobile where consumers use their social IDs. (Think Tumblr and Wordpress blogs, and mobile apps that require a social login.)

"The real gold in social is this publicly available data that we call asymmetrical connections, or indications of interest," said CEO Jon Elvekrog. "Who you're following, what you've pinned, Tumblr blogs you've re-blogged. By harvesting that public information, that gives us a really good idea about what stuff you'd like to see more of."

140 Proof has raised $6.25 million since it was founded in 2010, but the company is already profitable, Elvekrog said.

2. DataSift

The other darling from this busy week, DataSift, announced a $42 million funding round on Tuesday, pushing the company's financing total over $70 million. Half of the employees in the company are engineers, Bailey said, and the new funding means DataSift will continue to hire aggressively.

Bailey is clearly optimistic about the future of social data analysis and even expects college students to join in on the fun; he predicts universities will soon offer social data MBAs.

3. Gnip

Gnip is the third and final U.S. company with access to the entire Twitter firehose, a valuable commodity as it allows access to every tweet sent around the world. (The other two with firehose access, Topsy and DataSift, were mentioned above.) But Twitter isn't the only sources of social data for Gnip; the company also pulls from Tumblr, Foursquare and WordPress, among others.

The company, which was founded in Boulder, Colo., in 2008, also provides Twitter archive data to the Library of Congress.

4. LeadSift

LeadSift is a small startup, even by this list's standards. That doesn't mean it can't churn out useful results for its customers, though. LeadSift uses social media to bring brands and retailers the perfect customers. If you tweet about upcoming plans to go car shopping, for example, LeadSift will see that and most likely send your information to its automotive clients ahead of time.

The San Francisco-based startup scours Facebook and Twitter for public posts to find what people are talking about and actually buys its Twitter data from DataSift. Its most popular verticals include auto sales, insurance sales and retail. LeadSift is planning a Series A round of funding in early 2014, according to Tukan Das, CEO of LeadSift.

5. Lithium Technologies

Another social startup based in San Francisco (surprise, surprise), Lithium helps its customers build their own social communities online, often as part of larger company websites. The move allows Lithium clients to better engage with fans and customers of the brand, control where the conversation happens and become an active participant without relying exclusively on external sites like Facebook or Twitter.

The company announced a "pre-IPO" round of financing in September, netting $50 million to bring Lithium's total fundraising over $150 million. There is no set timetable for the company's IPO, according to sources close to Lithium, but an IPO toward the back half of 2014 wouldn't be a surprise.

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Image: iStockphoto, P2007

Topics: 140 proof, apple, Business, datasift, gnip, leadsift, lithium technologies, Marketing, social data, Startups, topsy, Twitter