Martech continued a strong trend in funding in the past quarter, with over $3.5 billion in new funding across 96 new investments by nearly 250 venture capitalists. That’s up from 85 investments in Q1, and marks a 24 percent increase over the already huge volume of deals in Q1.

Here are the full Q2 results.

E-commerce, adtech, and marketing operations investments lead the way, while analytics continues to be strong after being by far the most-invested-in category of Q1. BI, collaboration, and social also showed strong performance.

The data is based on an actively growing list of over 2,200 companies, 2,400 executives and investors, and 3,200+ investments we’re tracking at VB across the marketing tech landscape. (You can track our aggregated list too, at VB Profiles.)

There are some very notable trends for entrepreneurs, investors, and — most importantly — buyers of marketing technology.

The customer is eating everything

If software is eating the world, the customer is right there enjoying the menu. Both upstarts and entrenched SaaS companies continue to crop up and expand (seed stage and growth rounds were up from Q1 in frequency and volume), more rapidly putting new technology in the hands of marketers than ever before.

The DIY marketing stack continues to evolve into a more confusing, more layered mess, with the sole purpose of resolving the challenging notion of a customer’s ‘journey.’

“Treating marketing tech like the stepchild of functional departments, as it has been in the past, is a losing strategy,” says Ravi Belani, managing director of the enterprise incubator Alchemist Accelerator, “Investors have to quickly become comfortable with marketing tech investments.”

Belani also pointed to attribution and performance measurement, in particular, as huge issues for companies of all sizes.

Here’s the funding distribution, led by e-commerce and adtech.

Q2 marketing tech funding

Automation is a good thing

“Automation” is another clear trend.

Automating repetitive marketing tasks — spanning customer engagement and, increasingly, data analysis — is easily the most rapidly growing sector in the marketing tech landscape. Dystopian, jobless futures aside, there’s an increasingly stronger argument that automation at this stage allows data science PhD’s — a growing cost center for data-driven companies — to stop “gathering water” in a well of customer data and focus on the most important data.

That’s one of the reasons for the rise of predictive analytics, which saw 10 investments this quarter. In fact, between Q1 and Q2, we’re well over the $1 billion mark in new money dedicated to expanding analytics.


VB’s Q2 2015 Marketing Tech Funding Landscape
is available now for $99 (includes Q1 data) or free with your martech subscription


VC’s and entrepreneurs have good reason to be more optimistic in a world of automated marketing operations — where the idea of ‘machining’ tasks has grown from a function of engineering into radically transforming marketing’s scale and efficiency. Now that marketing is being forced to deal with this onslaught of customer data — the better and faster they can resolve it, the more influential they become.

And while we haven’t seen a $5 to $10 billion exit yet in marketing tech, that doesn’t mean it hasn’t been fruitful for investors. When customer ‘experience’ technology and marketing operations collide is where there’s real money to be made.

Company Amount Acquisition partner
ExacTarget $2.57 Billion Salesforce
Criteo $2.54 Billion IPO
Responsys $1.50 Billion Oracle
Hubspot $1.23 Billion IPO
Marketo $1.07 Billion IPO
Eloqua $871 Million Oracle
Neolane $600 Million Adobe

 

Q2’s funding data shows that VC’s are actively exploiting this trend with new deals, with a marked increase in “marketing operations” platforms as compared to Q1.

q2chiefmartec
Whether or not the mega-billion dollar exit exists in the current environment’s fragmented state remains to be seen. But VC’s and entrepreneurs sure are filling in the gaps to the bar graph above.

More than a feeling

We’re at a stage now where database technology and cloud services exceed our current capacity for analysis and are constantly being reinvented or made more available. The rapid proliferation of devices is causing the now-outdated, but still amazing ‘IBM-says-90%-of-the-world’s-data-was-created-in-the-last-two-years’ spiel to repeatedly update itself (…created in the last 2 months, weeks, days, day, or minutes). And finally, advanced data science is increasing in its availability and automation.

All of this technology is helping sales teams be more successful and helping marketers make smarter, more informed decisions. That means fewer gut feelings and more insights.

On the flip-side, there’s a growing notion in marketing departments of ‘more data, more problems.’ But it’s hard to argue with the fact that with more data comes way, way more potential opportunity.

“These trends, and the rise of marketing ops in particular, shows that while software is eating the world, marketing tech is eating human-powered sales and marketing processes,” says Nadim Hossain a serial martech entrepreneur who’s now leading another, BrightFunnel. “The rise of the Internet set off this wave and the explosion of marketing data and mobile have strengthened it.”

The new buyer’s journey, however we define it, is here to stay.