Marketing automation vendor Act-On Software today announced the finalization of $42 million in venture financing in a round led by Technology Crossover Ventures (TCV) with additional participation from Norwest Venture Partners, Trinity Ventures, US Venture Partners, and Voyager Capital. As a result of the funding raise, David Yuan, general partner at TCV, joins Act-On’s board of directors. Act-On intends to use the funding for all aspects of its business operations, including product development, sales, marketing and operations. The announcement of Act-On’s funding raise comes in the wake of IBM’s announcement of its agreement to acquire marketing automation firm Silverop on April 10.
IBM’s acquisition of Silverpop for an undisclosed sum builds upon Oracle’s acquisition of Eloqua and Responsys, Salesforce.com’s acquisition of ExactTarget and Marketo’s IPO in May 2013. Silverpop specializes in the personalization of marketing content based on the creation of customized audience profiles derived from email, social media and web and mobile activity and boasts 8000 customers in over 50 countries including the likes of Mazda, Stonyfield Farm and Advanced Micro Devices. Atri Chatterjee, CMO of Act-On, commented on the significance of IBM’s acquisition of Silverpop as follows:
The marketing automation industry has been heating up and Act-On is playing in one of the hottest markets right now…IBM acquiring Silverpop further validates the rapidly growing market and substantiates the industry as a whole. We are seeing an increasingly growing demand for marketing automation as companies are doing more online multi-channel marketing and moving beyond email. Corporate Darwinism is at work here in a fast evolving market. The companies that remain standing are the hyper-growth ones with leading edge technology, or the behemoths that are scrambling to enter the market.
Here, Chatterjee notes that the marketing automation landscape is rapidly bifurcating into two spaces marked by “behemoths” like IBM and Oracle that elected to scoop up attractive platforms such as Silverpop, and a selection of standalone vendors that differentiate themselves by consistently demonstrating their ability to innovate and respond nimbly to customer needs and the changing technology horizon in which all marketing vendors operate. Act-On definitively stands in the category of the “hyper-growth” vendors “with leading edge technology” as evinced by its growth to over 2000 customers and accolades such as the designation of leader in the Forrester Wave report on lead-to-revenue management platform vendors for Q1 of 2014. Today’s funding raise brings the total capital raised by Act-On to $74 million since it was founded in 2008. Act-On now has the luxury of innovating upon its integrated marketing platform to develop more accurate analytics and predictive modeling algorithms to drive the personalization of marketing content at both a population and individual customer level. Key challenges for the Beaverton, Oregon-based company will involve the platform’s ability to incorporate real-time analytics into its prescriptive marketing campaigns, the refinement of customer profiles as they evolve in the specific context of the customer’s relationship with specific brands and the ability to generate effective outbound content such as text messages that match the needs and predispositions of targeted consumers. With an extra $42 million in cash in hand, however, Act-On may well end up becoming one of the vendors scooped up by the “behemoths which are scrambling to enter the market,” particularly if it can consolidate its impressive traction to date and enhance its platform to the point where it becomes the undisputed leader in the marketing automation space.