NEW YORK: Prosek Ventures, a standalone company run by Prosek Partners, has made a strategic investment in Qwoted, a source-development platform for PR pros and journalists that was developed by financial communications firm Vested.
Proceeds from the investment will be used to "accelerate the development of new features and fuel sales, marketing and customer service," according to a Vested statement.
Financial details were not disclosed. Vested’s partners still own a majority stake in the business, said Vested co-founder and CEO Dan Simon.
Created to explore investment opportunities in comms tech, a growing $4.1 billion industry, Prosek Ventures is funded by the agency’s partners. It’s the first investment the company has ever made, according to Prosek Partners founder and CEO Jennifer Prosek.
Qwoted’s board will now be comprised of Prosek partner Russell Sherman, Vested co-founder and president Binna Kim, Vested CFO Seth Rosenstein, Jennifer Prosek and Simon.
Qwoted allows PR pros to promote their clients as potential sources to journalists. Powered by machine learning, the platform learns from journalists’ queries over time and tries to return more precise and relevant results.
Prosek said she was introduced to Qwoted more than two years ago when it was still being developed. She compared it to a ProfNet with a technological edge or a market maker where PR people and reporters can buy and sell.
"The efficiencies it can create on both sides are absolutely enormous," Prosek explained. "I immediately said to him: I’m guessing you won’t partner with us because we compete, but if you want an investor, I’m 100% in."
Another big draw for Prosek was the caliber of journalists the platform attracted from tier-1 publications, such as Reuters and MarketWatch.
"It’s very powerful in terms of creating a dialogue between reporters, sources and PR pros in an environment that is more helpful to all individuals," Sherman said.
Simon said on a macro level, Qwoted helps solve for the existential problem many PR agencies face: PR’s differentiating factor, its knowledge and data, is being "commoditized."
"In a world where all that information is universal, what is the value they bring to their clients?" Simon asked.
Simon’s pitch is that Qwoted will help PR agencies differentiate themselves from their competitors. Staffers from Weber Shandwick, Edelman, Hill + Knowlton Strategies, FleishmanHillard, FTI Consulting and others are already on the platform.
Simon added the organization is evaluating revenue opportunities and the long-term financial strategy.
Launched in Q3 of last year, Qwoted signed on thousands of users. It was developed by CTO Kevin Trowbridge, Simon said. Vested declined to break out its specific number of users or any metrics around engagement.
Qwoted started as an internal beta product called Vested IQ. Eventually, the firm decided to spin off IQ as its own entity, which became Qwoted. It remains independent as a means of making sure its biggest user base, PR pros, are comfortable on the platform.
A "freemium" product, Qwoted is free-to-use, except for areas involving "team capabilities," Simon said. For example, a Vested private equity client that may be interested in white-labeling Qwoted could have its own portfolio companies use the platform.
Asked if Qwoted is profitable yet, Simon said it’s "pre-profit. We’re not running Qwoted to be profitable from day one. We built it as a larger benefit to the PR community. We remain very focused on making sure when media has requests that the PR community steps up and answers them."