United Internet has acquired a minority stake in SME marketing software company rankingCoach through a €5 million (approximately $5.4 million) funding round, the companies announced Tuesday. rankingCoach will use the investment to fund service expansion and continued international growth as the company attempts to establish itself as an international brand.
Since launching in 2014, rankingCoach has grown to provide web-based search engine optimization (SEO), search engine advertising (SEA), and social media solutions for local companies in 24 countries, directly or through the channel. The company had a CAGR of 633 percent in 2015, according to the announcement, and it will launch the integrated rankingCoach Suite this year as a central online marketing platform.
“Over the last few years we managed to increase our user base and our reach exponentially,” Daniel Wette, CEO of rankingCoach said in a statement. “With the investment from United Internet we can now continue our growth strategy and establish an international brand. Our goal is to provide local companies around the world with a marketing suite, which helps them to promote their business easily and efficiently themselves.”
With the investment, United Internet gets a 29.93 percent stake in rankingCoach.
“Online marketing continues to be an increasingly competitive area as hosters and service providers battle to build value-add on top of infrastructure hosting,” Philbert Shih, managing director at Structure Research told The WHIR in an email. “1&1 has made a bet on the rankingCoach platform, which has shown steady growth in its relatively short history.”
United Internet sold one-third of its Business Applications unit, which includes 1&1 and other hosting brands, to Warburg Pincus in November. United Internet CEO Ralf Dommermuth said at the time that the company would delay an IPO initially planned for 2017 to make new investments and acquisitions. A month later United Internet AG acquired German hosting company Strato for roughly €600 million.
“User-friendliness and ease-of-use of cloud-based solutions are key success factors to keep up with small and medium enterprises,” Frank Krause, United Internet CFO said. “This is exactly what rankingCoach has created with its online marketing solutions. With our investment, we would like to actively support future development of this success model. In addition, the rankingCoach Suite will ideally enhance the 1&1 product portfolio of cloud applications for small and medium enterprises.”
The investment by United Internet Investment Holding GmbH is subject to the usual antitrust approval processes before closing.