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The State of MarTech Report

There has never been a more exciting time to work in marketing and technology. The world was already digitising rapidly, but the pandemic has accelerated this digital transformation. Companies that have been forced to adapt to evolving customer behaviours to survive now have an opportunity to thrive.

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Martech Mania: Getting Deal-Ready

The global martech sector is growing and looks set to take the investment world by storm.

According to chiefmartec.com, there are now just shy of 10,000 martech solutions to choose from. This represents an increase of some 6,000% in a decade. IT vendors and agencies need to get their ducks in a row now to lure their future ideal investor.

At Moore Kingston Smith, we have been keeping a close watch on the overall worldwide market growth rate for martech. We now track specific martech M&A deals impacting UK-headquartered stakeholders.

 

Martech magnet for private equity

We are seeing martech increasingly attract private equity investment. Budgets are migrating away from media as marketers become savvier with new tools and techniques, especially around the deployment of data to support online growth.

The fast-growing global martech sector saw the completion of 166 deals in 2021, with 37 of these deals being valued at over $100 million. This is sending a back-on-track message after 2020, which saw deal flow at half the current rate despite the global growth in martech spend.

Overall, it’s the US who is the standard bearer for martech M&A and the UK is in hot pursuit. Acquisitions naturally follow investment in martech by brands and agencies. We expect gradual increases in deal completions throughout 2022 in both the global and specifically UK markets.

 

Deals driven by data

In the first quarter of 2022, half the martech deals completed in the UK involved private equity. Unsurprisingly, data is the top sector for investment and here are some of the most exciting acquisitions to have taken place so far this year:

  • Digimarc Corporation acquires Evrythng, a platform providing real-time product data, for transparency of the factory-to-consumer life cycle.
  • Naviga acquires Abacus, an SaaS-based platform that improves revenue and engagement with personalised digital experiences.
  • Euler Digital acquires AI Forum, provider of AI services intended for marketing, sales and CRM.
  • The Channel Company acquires bChannels, a global martech business deploying data-driven and predictive analytics to drive greater effectiveness of marketing budgets.

The M&A challenge for martech companies and agencies

The pandemic has brought about an industrywide acceleration of interest in martech. It’s game on for martech companies, such as those providing CRM solutions, email automation capabilities, social media planning and scheduling tools, and virtual experience marketing platforms. They will need to stand out from the flock when it comes to further market consolidation.

IT vendors will need to be all over the latest shiniest tech and know what clients want before they do themselves. They will need to be hatching innovative solutions with slick functionality, easy customisability and super-efficient reporting.

Agencies will need to keep pace in lockstep with these developments. It is agencies that will be implementing these new martech solutions, integrating them into their clients’ existing martech stack and advising on best practice for the best ROI.

As UK investors become increasingly selective, the most successful investable players will be those demonstrating strong commercial skills, sticky client contracts and high visibility in the wider martech marketplace.

 

Help from the experts in martech M&A

Moore Kingston Smith is the vanguard banging the martech drum. We also have in-house M&A and private equity specialists who co-ordinate deals worth a quarter of a billion pounds on average a year.

Contact us to see how we can help you with your martech M&A.

The Martech Report 2021/2022, produced by The MarTech Alliance in association with Moore Kingston Smith, has had a phenomenal reception. Click for The Martech Report 2021/2022.