Hubba lands $3.1M to help better connect brands and retailers
A Q&A with Hubba founder and CEO Ben Zifkin. The Toronto-based startup, which offers a cloud-based B2B product information network, last week announced the closing of a $3.1 million Seed funding round. Investors include Brightspark Ventures and The Social + Capital Partnership, along with Angel investors. It was founded in 2012.
SUB: Please describe Hubba and your primary innovation.
Zifkin: Hubba is a product information network for brands and retailers to share product content, such as images, videos, documents, marketing and promotional materials, and more. Designed like a social network, Hubba is a single source of truth for brands to curate this product content in one place and then synchronize it to an infinite amount of business connections in real-time.
SUB: Who are your target markets and users?
Zifkin: Our target users are the people working on the front lines in both brand and retail, who as part of their daily lives need to exchange product information—things like descriptions, feature and benefits, dimensions, and rich media—anything that will lead to a better informed consumer and lead to more sales. Typically on the brand side, this might be sales, marketing, brand managers, or trade marketers, and on the retail side marketers, buyers, category management, and e-commerce/digital team members.
Rather than spending our time at the executive level, we prefer to focus what we do on the employees who use, and get value from, Hubba on a daily basis. Although we’ve directed our early attention on becoming a household name in the CPG, beauty, sports and apparel, and health and wellness spaces, in 2015 we’re planning to expand Hubba into the fashion, electronics, baby, and pet spaces.
SUB: Who do you consider to be your competition, and what differentiates Hubba from the competition?
Zifkin: We’re up against different entities depending on the tier. On the low-end, we generally displace technologies like spreadsheets, email, FTP servers, and Dropbox. On the high-end, we see legacy MDM, PIM, and DAM players like SAP and Informatica.
But we do not see any of these as competition. Our strength is in the ability to share product information. If you have an existing process or solution, we simply act as a thin layer that pulls these pieces together and allows you to get the right information into the hands of the people who need it.
SUB: You just announced that you’ve raised $3.1 million in Seed funding. Why was this a particularly good time to raise funding?
Zifkin: Our Seed financing was successful and oversubscribed, so we decided to increase the amount we had originally targeted to raise. Since inception, Hubba has been founder-funded. This was an opportune time for Hubba to raise external financing, as we had completed the revamp and re-launch of our B2B platform and experienced very strong adoption immediately following its July 29th launch.
SUB: How do you plan to use the funds, and do you have plans to seek additional outside funding in the near future?
Zifkin: The Seed funding is being used to accelerate the growth of our B2B Product Information Network, in terms of number of companies, brands, retailers, and products on the platform, including penetration of additional vertical industries. We also have a detailed product roadmap, which we continue to fine tune and re-prioritize based on feedback and input from our customers.
In terms of additional financing, while we are very prudent and targeted with our spending, we are very encouraged by the rapid adoption of our platform since the mid-summer launch. The number of companies, brands, and products profiled on Hubba has significantly exceeded our initial targets, with over 1,000 companies signed on in just the first four-and-a-half months. We see tremendous growth potential and are currently evaluating future fundraising options. Based on these opportunities, coupled with inquiries we have received from potential financial partners, we are likely to be commencing our Series A raise process in the first calendar quarter of 2015.
SUB: What was the inspiration behind the idea for Hubba? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Zifkin: The initial ‘aha’ moment happened when the iPhone came out. My phone was no longer just my communication device—it was a small computer that helped me throughout my day. Unfortunately, I was still unable to get accurate product information about the things I cared most about. I really started to look into this game of broken telephone between brands and retailers. The deeper I went, the more broken I realized this world was. I said: “I can fix this,” and be a driving force in opening the floodgates of this next generation of commerce that is completely reliant on this information.
SUB: What were the first steps you took in establishing the company?
Zifkin: Starting a business is a balance between data and gut feel. It sounds esoteric, but going into a business based on stats alone is a recipe for disaster. There needs to be some passion, vision and feeling for where things are going. On the flipside, the converse is true. Going into a business strictly on gut feel without being fully informed on the market or potential market is equally dangerous. I felt the importance of this company immediately. My first step was to validate it with data to corroborate my feeling. At one point, I knew that I couldn’t wake up another day without working on this challenge.
SUB: How did you come up with the name? What is the story or meaning behind it?
Zifkin: We had some important criteria. First, it needed to be easy and memorable. Second, it needed to reflect the company and show that although we are a serious enterprise organization we don’t take ourselves too seriously. Finally, it needed to reflect what we did in some way. We are the ‘hub’ of great information.
SUB: What have the most significant challenges been so far to building the company?
Zifkin: Trying to change an entire industry—we call it our ‘ultraprise model’—is obviously a huge undertaking. In the early days of Hubba, we applied a traditional top-down enterprise sales model and had to spend disproportional amounts of time and effort gaining early customers. As we’ve evolved the company, we’ve learned two key things that have completely changed how we do business: First, although we’re transforming industries, an intense focus needs to be placed on the user that’s in the trenches, as they’ll ultimately become our most fervent advocates and grow the network. Much of Hubba’s growth comes from minimizing our time in the boardroom and instead spending our customer time with the fantastic members of our community—the users on the front lines. Secondly, we realized the importance of completely dominating industries rather than taking a scattershot approach and trying to be all things to all people. By taking a targeted approach to a small number of key industries, we were able to create critical mass and grow an organic network.
SUB: How do you generate revenue or plan to generate revenue?
Zifkin: Hubba is free—and always will be—for individuals to use as a better way to share product information and assets vs. emails, FTPs, and file-sharing services. We’re quickly becoming the defacto standard in many industries for brand salespeople and marketers to quickly-and-easily share their content with retail counterparts.
Hubba generates revenue through our enhanced paid versions, with features like collaboration for organizations that want to use Hubba as their internal ‘source of truth,’ workflows and approvals, and integration with back-end systems. Since the people on the frontlines at brands and retailers use Hubba as a smarter way to share information, it’s been a logical next step for many of our customers to use Hubba as their central repository; or for larger clients, who have already implemented a PIM/DAM/etc. platform, as the ‘connective tissue’ that brings this information together in a usable format.
SUB: What are your goals for Hubba over the next year or so?
Zifkin: In the next year, Hubba is completely focused on owning our market—doing so by infiltrating specific verticals through our cluster selling approach. Replicating the success we experienced in the sports apparel, CPG, and health and beauty spaces, we’re getting ready to expand into new verticals to start 2015 off in a big way. In order to do so, we’ll be expanding and complementing the amazing Hubba team with key hires.
For us, it isn’t the size of the team that demonstrates success, but the pure brain power around the table that will help us win. Although we have more than enough funding, we have learned a lot since our launch. Though we will not be actively looking for additional funding immediately, we will be evaluating key opportunities to work with great partners—particularly those who will amplify our growth—as they present themselves.