Late yesterday, the story broke on TechCrunch that Marketo has filed for a $75 million IPO.
Congratulations to everyone there, but a special nod to the early founders Phil Fernandez, Jon Miller, and David Morandi, who were key folks at early marketing software pioneer Epiphany 10 years ago (which itself, tangentially, was founded by Steve Blank, the fellow who inspired Eric Ries in the launch of the Lean Startup movement).
Taken in the context of Teradata’s acquisition of Aprimo in 2010 for $525 million, IBM’s acquisition of Unica in 2010 for $480 million, Eloqua’s IPO in August 2012 raising $92 million, ExactTarget’s acquisition of Pardot in October 2012 for $95.5 million, and Oracle’s acquisition of Eloqua for $871 million that closed in February 2013, it’s clear to see the growth of “marketing automation” (labels vary).
And more rapid growth in the space seems likely. At the Marketing Operations Executive Summit last month, Craig Moore of Sirius Decisions estimated that only 20% of B2B organizations are using a marketing automation platform (MAP) today, but 50% expect to be using one by the end of 2015.
To get a better sense of Marketo’s growth in particular, and some of the economics behind it, here’s an excerpt of their financial operations from Marketo’s S-1 filing with the SEC:
There are a few other excerpts from the S-1 that I think offer interesting insight into the industry:
- according to the CMO Council’s 2011 State of Marketing report, global marketing and communications spending exceeds $1.5 trillion annually
- in IDC’s 2012 CMO Tech Marketing Barometer study, technology CMOs estimate that 8.7% of their total marketing program budget will be spent on marketing IT
- Gartner estimates that, in aggregate, the marketing software categories in which Marketo competes represents a $32 billion market in 2013 that will grow to nearly $41 billion by 2016
- Marketo currently has over 2,000 customers worldwide
- 87.2% of Marketo’s revenue was generated from within the US in 2012
- “a significant majority” of Marketo’s revenue is derived from B2B companies — greater penetration of the B2C market remains a challenge
- 79% of Marketo customers integrate with salesforce.com
- other competitors explicitly named, in addition to the ones I mentioned above, include Act-On, HubSpot, Responsys, Silverpop, SAS Institute, and SAP
- it’s noted that other CRM vendors such as Microsoft, NetSuite, and salesforce.com — as well as marketing software juggernaut Adobe — may yet develop or acquire competing solutions
In full disclosure, my company is a Marketo partner — our post-click experience software integrates with their platform. I’ll also be speaking on agile marketing at their upcoming user summit next week. So definitely don’t take any of the above as “investment advice.” I’m conflicted five ways from Sunday.
But I personally think this is another excellent step forward for the marketing technology industry as a whole. Kudos Marketing Nation!
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