M&A activity in the Martech Sector

MarTech – a saturated market

Merger and acquisitions commonly occur when companies combine their resources, operations, or assets.   2024 will see a large consolidation of MarTech companies, as saturation kicks in. In the context of Martech, this often involves two companies with complementary technologies or services merging to create a more comprehensive marketing solution – as they look to up-sell and cross-sell across the larger, more integrated platform.  In most cases, the acquiring company assumes full control of the purchased company’s assets (an asset sale), including technology, intellectual property, customer base, and other resources. In the Martech sector, this often occurs when a larger company acquires a smaller one to expand its capabilities or market presence.

In the Martech sector, mergers and acquisitions typically occur with specific strategic objectives:

Advancing technology: Companies may acquire others with cutting-edge technologies or platforms to bolster and improve their current marketing technology offerings.

Expanding Market Research: By acquiring a company that already has a robust presence in specific markets or among particular customer segments, businesses aim to broaden their market access.

Streamlining Operations: Mergers and acquisitions are often pursued to achieve operational efficiency, reduce competition, and consolidate resources, leading to economies of scale.

Diversifying services: Companies seek to diversify their portfolio of services or solutions by integrating the unique capabilities of another entity. This diversification enhances their overall value proposition in the Martech landscape.

Here are a few notable mergers and acquisitions that occurred in 2023:

Splio, a prominent CRM expert and creator of the SaaS Individuation® marketing platform,  officially acquired Tinyclues, a recognized specialist in SaaS predictive marketing utilizing deep learning AI. This strategic move reflects a mutual goal to empower brands in seamlessly orchestrating extensive, highly personalized marketing strategies. The collaboration aims to provide businesses with the tools and capabilities needed to execute large-scale, hyper-personalized marketing campaigns effectively.

Symphony Technology Group (STG) is leading a consortium which purchased Momentive Global for $1.5 billion. Momentive, known for creating SurveyMonkey and providing solutions for insights management, entered a firm agreement to be acquired by the consortium in an all-cash transaction. JT Treadwell the Managing Director at STG stated” We have long admired the company during our 20-year history of active investment in the insights and analytics sector, and are very excited to partner with the team at Momentive to build upon their excellent foundation. Together we will continue delivering exceptional value and innovation to individuals and enterprises globally.”

Qualtrics (NASDAQ: XM), the leader and pioneer of the experience management (XM) software category, announced that it entered into a definitive agreement to be acquired by Silver Lake. Silver Lake and its co-investors, together with CPP Investments, acquired 100% of the outstanding shares Silver Lake did not already own. Qualtrics will become an independent, privately held company positioned to drive category-defining innovation and efficient growth at scale on its path to becoming the next great enterprise cloud software platform.

It is not just a transaction:

It’s clear that mergers and acquisitions are game-changers in the Martech scene, moulding the marketing technology arena into what it is. These strategic moves, fueled by goals like tech advancement, market expansion, and operational efficiency, paint a vivid picture of how companies in Martech navigate the ever-evolving landscape. Take the Splio-Tinyclues partnership, for instance, their collaboration isn’t just about merging companies; it’s a bold step toward revolutionising personalized marketing through cutting-edge tech like deep learning AI. The goal? Empowering businesses to run large-scale, hyper-personalized marketing campaigns that truly resonate. In a nutshell, Martech’s mergers and acquisitions aren’t just about business transactions; they’re shaping the industry, fostering innovation, and responding to the ever-changing needs of businesses in the digital marketing era.

For more information on how TKM Consultants can either assist with your M&A strategy or your MarTech challenges, please contact us at hello@tkm-consultants.com