Marketing Tech Hottest Sector for VC Fundings

Marketing technology is emerging as one of the hottest sectors for business tech investing, according to the PitchBook Blog. Marketing tech companies in the first six months of 2015 raised $1.62 billion in 157 venture capital deals, and 205 companies were acquired for a total of $4.3 billion.

Marketing tech tools are becoming increasingly sophisticated as the sector matures. Established players are on an acquisition roll, and start-ups are finding strong venture capital interest. PitchBook reports that companies like Twilio, Buddy Media and Sprinklr are “creating the tools to integrate and monitor processes ranging from social media management to sales automation.”

Research firm IDC estimates that over the next decade, the volume of data generated by businesses will multiply by a factor of 47. The wealth of competitive and customer insights buried in that data will continue to be a key strategic asset for both operations and strategy. Bain and Company analysis states that businesses that use an analytics driven operational approach clearly outperformed their peers, driven by up to 3 times more effective decision-making.

Marketing is the function that being the most transformed by data. It is estimated by the Gartner Group that by 2017, CMOs will spend more on technology than CIOs as corporate marketing departments purchase significant marketing-related technology and services from their own capital and expense budgets–both outside the control of the internal IT organizations, according to Gartner.

On average, 40 percent of marketers’ time is spent dedicated to analysis, yet 62 percent of them still cannot quantify the value of their marketing efforts. With marketers overwhelmed by pressure to prove the value of their efforts to the company, spending on marketing analytics is expected to increase by 73 percent over the next 3 years.

  • There have been 1,062 closed venture capital deals for marketing tech since 2010;
  • Over the last 18 months, there have been 461 VC deals in marketing for a total investment of $4.1 billion. For the first six months of 2015, there have been 167 VC deal in marketing for an investment of $1.62 billion;
  • The average funding size is $5 million;
  • Biggest deals: Twilio = $130 million; Taboola = $117 million; and Birst =$67 million;
  • Merger volume hit $4.3 billion

The top investors in marketing tech are Salesforce Venture, Sequoia Capital, Battery Ventures, Bessemer Venture Partners and Google Ventures. Given the huge dollar flow, marketing tech will continue to be one of the hottest sectors of venture capital investing.


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