We’ve tracked nearly $3.8 billion in funding, acquisitions, and IPOs for over 80 tech startups and over 250 VCs in Q3 of 2015 and want to share the findings. It’s the most comprehensive data and insights available on the aggregated marketing technology list at VB Profiles. The growing list includes well over 2,100 companies, over 2,400 executives and investors, and nearly 3,200 funding events … including $45.2 billion raised last year.
The full results with detailed data and analysis are available here.
Keep in mind these amounts don’t include undisclosed acquisitions, angel investors, or friends and family fundraising. For instance, we tracked several acquisitions of undisclosed cash and stock, some rumored in the $1 billion range. The true totals for marketing tech in Q3 2015 are likely much, much higher than $3.8 billion.
However, the volume of deals, in both amounts and frequency, shows VC confidence is up in marketing tech. But it’s more important to understand where they’re gravitating toward and why that matters for marketers.
The Q3 Marketing Tech Funding Landscape report is available on VB Insight for $99 and includes Q1 and Q2 results
Q3 was dynamic. We saw fewer investments overall but higher dollar amounts across the board than in Q2. We noticed more diverse funding partners and more investors overall than previous quarters.
Top investors included:
- 5 investments: Sequoia Capital
- 4 investments each: Andreessen Horowitz, Foundation Capital, Salesforce Ventures
- 3 investments each: Accel Partners, AME Cloud Ventures, Battery Ventures, Greylock Partners, Illuminate Ventures, Index Ventures, New Enterprise Associates
- 1-2 Investments each: hundreds of other VCs
Fresh funding is keeping pace with acquisitions. There were 31 early A or seed stage investments and 24 acquisitions overall. This means for every consolidation, at least one brand new company popped up in its place. This is up from Q2 and could point to increased investor optimism moving forward.
The most wholesale change from previous quarters was the rise of marketing operations platforms. The focus of marketing ops is to automate tasks and inform decision-making in marketing. Investors were choosier about where to put dollars in this category this quarter, though they spent nearly double the amount as in Q2. Marketing experiences tech, such as advertising technology, was down compared to Q2, though still a hot category overall.
Analytics was once again a billion-dollar category unto itself — a space we’re looking at closely with unbiased research.
Mobile and ad tech are linked industries. Adtech is ripe with funding and activity right now. We counted 13 new counts of funding, ranging from $1.6 million at the low end (AdAgility) to $125 million at the high end (Zeta Interactive). Most were mid or growth stage events. From the brand and marketer perspective, this market looks to be maturing, but is still a maddening place to spend marketing dollars, particularly in mobile advertising. Mobile ads, as we noted in a recent research report, is looking at a $25 billion opportunity gap between the time spent on mobile and the actual dollars spent there. This category is primed to accelerate even more quickly than previously expected.
More platforms means more confusion and purchasing decisions. Backbone tech (in some cases, marketing automation platforms themselves) is also up for a second consecutive quarter, solidifying this as a real trend to watch and account for. Companies are making wholesale changes in their data infrastructure that affect end users down the line — this and more nimble data processing technology is birthing even more innovation in the space.
It’s important to remember that this is only 3 months of data, and likely not even close to all of it.
Across the board, we’re seeing the following major trends coming true for successful software businesses:
- Actively managed data companies: The troves of data created in enterprises are becoming increasingly fragmented. Businesses need solutions to store and access data in integrated ways.
- Data distribution companies (with context): Organizations struggle with finding/delivering the right information, at the right time, in the right format, to the right audience. The data is there. The content and services are catching up.
- Companies that promote agility: Be fast or be dead.
For end users, the money going into marketing tech categories today means product tomorrow. VCs are making bets now on what you are going to need in the future. The big keys here are data analytics, mobile, ad tech, customer experience management, collaboration, and personalization, another key research area for VB Insight. There’s money being absolutely pumped into these categories that will affect how you communicate with customers and manage your team. Get up to speed on what’s happening in the VC community in these categories so you can stay ahead.