A slate of local investors led by New Enterprise Associates pumped $26 million into District-based newBrandAnalytics, a business intelligence firm that helps hotels, restaurants and retailers track customer feedback on social media.
But it’s a deal that almost didn’t happen.
NewBrandAnalytics had a term sheet on the table with investors in Silicon Valley when former D.C. mayor Adrian Fenty, who now sits on its board, asked co-founder Neil Kataria to a last-minute breakfast this summer with a partner from NEA.
That meeting opened the door to sit-downs with other local investors, including former AOL chief executive Steve Case and Tige Savage, part of the Revolution investment firm, and business mogul Ted Leonsis. They all wound up putting money in, along with a few hospitality firms.
Within a span of two weeks the company opted to change course entirely, staying in Washington with money from local backers, Kataria said.
Kataria co-founded newBrandAnalytics in 2007 with Kam Desai and Ashish Gambhir after launching several prior ventures in San Francisco that ranged from an enterprise software firm to a salon and spa.
It was while running the latter venture that Kataria began to appreciate the influence that online customer reviews can have on a business. He thought stores could use the feedback to inform how they operate.
“Unless you’ve been an operator before I think it’s hard to build a product from that lens,” he said. “It has to be at the store level to really gain dramatic insight to inform operations.”
The company’s software trolls the Web for references to specific brands and uses location data to pin the reviews to individual storefronts. It then taps a database of 10 million keyword pairs, such as “poor service” or “good food,” to extract actionable feedback.
“Online reputation has been important and is growing in importance, but it’s beyond just keeping track of your reputation. Its also about figuring out how to operate your stores better,” said Tom Grossi, a principal at NEA who sits on the board.
Several brands, including Shake Shack and Sheraton, have signed on to use the software since it debuted earlier this year. Kataria said the $26 million will allow the company to target new clients and add staff.
“One of the things that excited us so much is the size of their existing pipeline and existing customers,” Grossi said. “They’ve got some real marquee customers lined up to use the product.”