This year will be a buyer’s market for martech M&A, as venture-backed marketing technology companies founded between 2013 and 2017 look for a exit in a crowded (and still growing) market.
That’s the view of Scott Brinker, the editor of chiefmartech.com and VP of platform ecosystems at Hubspot. Brinker recently penned a blog post which lays out a thesis for the future of martech, including that many young martech companies will be forced to go public, raise more money, become substantially profitable, be acquired or shut up shop over the next few years.
One potential acquirer is CM Group — a collection of email marketing companies including Australian-founded Campaign Monitor. The US-based company was formed after global venture capital and private equity firm Insight Venture Partners acquired a majority stake in Campaign Monitor in 2014.
To grow Campaign Monitor’s business quickly in order to score larger deals, bigger clients and offer more personalisation features, its backers decided to add two more email service providers, Delivera and Emma, to the company’s product offering.
This month it announced two new acquisitions had been completed in 2018, an enterprise grade email platform Sailthru and LiveClicker which offers real time personalisation inside emails, for example a countdown timer until the end of an online sale.
In an interview with Which-50, CM Group CEO Wellford Dillard, said the company would continue to look for acquisitions which would add new technology capabilities to its existing roster of email marketing products.
“We will continue to look for additional acquisitions that bring innovation to all of our brands,” Dillard said.
While CM Group may consider buying another email platform if it allowed them to enter and new geography or industry, Dillard said they would more likely pursue technology companies which brought more capability to their clients offering more personalisation, loyalty programs or helped with list growth.
Chief product officer, Cody Bender, says Campaign Monitor is an attractive acquirer for start-ups attempting to scale because the group offers access to a global customer base, and existing business and technology infrastructure.
“You have that proliferation of venture-backed companies and they are getting to a point where it’s scale time,” Bender said.
“From an M&A standpoint we are seeing a lot of interest in us as a destination because they are at the point of wanting to know how to scale and this seems like a good fit from a technology standpoint, a customer standpoint and a business infrastructure standpoint.”
Dillard added, “Insight Venture Partners is a growth fund – there’s no intent here for us to be aggressive on the cost structure of these businesses, we are here to put money into them and actually grow them.”
“We can bring to bear a larger, more sophisticated global security team that’s stronger than what the individual businesses would be able to afford. We can build a much stronger global deliverability and compliance team than any of these individual brands could have.”
Wellford said Campaign Monitor’s growth rate in Australia has remained steady over recent years and around 10 per cent of CM Group’s global revenue is generated in Australia, with clients in the not-profit, higher education and publishing sectors.
After a period of restructuring Campaign Monitor now has plans to “get louder in the Australian market” by running out of home advertising campaigns and events, as well as adding more sales resources.
Bender noted the marketing activity will help the company recruit talent locally.
“The Australian office is mostly a product office. We have a lot of engineers, a lot of great product people, designers and product managers. We want to make sure we are louder here because we want to continue to attract talent,” Bender said.