YoY funding growth reaches nearly 50% as investors pour dollars into a wide range of sales and marketing technologies from B2B lead management tools to marketing data analysis platforms.
Marketing and sales departments now integrate a number of digital technologies into their core functions ranging from tools to help CMOs forecast their budgets to B2B referral programs to marketing automation. And investors aren’t staying on the sidelines. Over the last year, the digital marketing and sales technology industry (DMS Tech) saw $2.4B in venture capital, angel, and private equity funding across 347 deals. On a year-over-year basis, deal activity in the DMS Tech space has jumped 24% while funding has accelerated nearly 50%.
DMS Tech covers a wide array of use cases and applications with the space being comprised of seven specific sub-categories as detailed below (with illustrative companies listed for each).
- Marketing Strategy & Planning Tech: Technologies to help CMOs and other managers get a big-picture view of their marketing and sales operations. They provide market forecasting, budgeting and collaboration tools. (PivotLink, Allocadia)
- Marketing Data Analysis: Technologies to facilitate the gathering and interpretation of data in order to better understand the customer, optimize marketing operations and analyze behavior for better segmentation. (BlueKai, Dachis Group)
- Marketing Mix Management Tech: Technologies to help manage and automate the multiple ways that businesses use to interact with customers. They create one unified software that combines data processing, social media, and customer contact. (Hubspot, Hootsuite)
- B2B Lead Management/CRM: Technologies that cover the sales operations of organizing and maintaining contact with important leads. (Genius, Pardot)
- B2B Sales Tech: Platforms assisting salespeople convert leads into actual sales. With technologies ranging from communications platforms to task automation, these products get salespeople close to the buyer so they can close the deal. (Infopia, LeveragePoint)
- B2C Customer Acquisition: Services that help to hook a consumer after the marketing mix has taken effect. These include technologies such as referral programs, social shopping experiences and custom landing pages that help companies convert customers who are already engaged. (Strutta, 8th Bridge)
- Retention/Feedback Tech: Retention and feedback is the final stage in both the marketing value chain and sales pipeline. This category covers a wide range of technologies from customer service automation to survey tools. (SurveyMonkey, Genesys Telecommunications Laboratories)
While DMS Tech has seen several large financings including Qualtrics and XL Marketing which each raised separate $70M rounds in 2012, deal growth is primarily occurring at the early stage (Seed/Angel/Series A). Over the past two years, early-stage deals have made up over 60% of all DMS Tech deals, with Seed/Angel deals seeing 36% YoY growth as shown below.