Welcome to the Q2 2017 edition of the Marketing Technology Barometer – Results International’s quarterly review of the global advertising and marketing technology sectors.
Following on from a strong first quarter, the public markets have continued to perform well with all five of our Results indices showing growth over the last quarter. In particular, our Results MarTech index rose ~16% in Q2, with an overall gain of ~90% over the last 12 months, supported by dotdigital, Hubspot, and New Relic (all growing 45%+) and Shopify, which nearly tripled in value in the last 12 months. Particularly encouraging for the previously ailing AdTech sector is to see the index gain over the previous 12 month period, the first time this has happened since our quarterly reports began 12 quarters ago. Notable strong AdTech stocks over the last year include Taptica (mobile ad platform), which has more than quadrupled in value since July 2016, and The Trade Desk and Crossrider (both 100%+ growth) following positive trading updates, hinting towards renewed investor appetite in the space.
This quarter saw the successful IPO of local search marketing and content management firm Yext in April, which has since reported a positive trading update to Wall Street and continues to trade above its IPO valuation at a strong revenue multiple, making it the latest billion dollar company to join the Results MarTech index. However, being valued at $1bn+ is an achievement but not a guarantee of success, as demonstrated by ‘unicorn’ Ve Interactive which this quarter was saved from administration after a £2m management buyout. The fate of the UK-based customer engagement and analytics startup, once tipped to reach a $10bn valuation, demonstrates that investors in this, now rationalising, market are focused on business fundamentals: growth with a path to profitability, not growth at any cost.
Following another busy quarter in M&A (102 deals), the H1 deal run-rate of 217 suggests that 2017 could report the highest number of deals on record, beating the previous high of 428 deals in 2014. Oracle’s $850m acquisition of DMP Moat in April exemplifies a key trend that we have seen in recent quarters whereby strategic valuations are being achieved by data intensive and insight-driven platforms with high levels of recurring revenue. Snap’s reported $200m acquisition of Placed, the location-based marketing and analytics platform, follows in similar suit to the acquisition activity of both Twitter and Facebook who acquired MoPub and LiveRail respectively in order to better monetise their offering.
In a similar vein to Q1, Q2 saw three $100m+ raises. Substantial rounds from both Qualtrics and Zeta Global, who raised $180m and $140m respectively, suggests there could be some interesting IPO activity ahead, with MediaMath’s $175m debt raise providing them with flexibility on when to IPO. There was also a number of notable earlier rounds from European companies, including MPP Global, Yieldify and AB Tasty, all looking to disrupt the increasingly fragmented eCommerce and optimisation space. With few standalone marketing clouds listed publicly, raises from IgnitionOne, Zeta Global and MarketLogic point towards further exciting exit activity in both the private and public space.
Market trends continue to show signs of positivity; AdTech, MarTech and the wider tech universe continue their recovery from a relatively tough few quarters. MarTech has again had a notably strong performance this quarter and AdTech is showing definite signs of recovery. 2017 and beyond remains exciting for both. As such, now would be a good time to be contemplating fundraising, exit or growth through acquisitions in the AdTech and MarTech space – if you are, please do get in touch.
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We hope that you enjoy the document and look forward to discussing the data and underlying themes with you. We have also produced our view on the previous quarter’s proceedings in a series of other market reviews on: