"The marketing automation industry has been heating up and Act-On is playing in one of the hottest markets right now,” said Atri Chatterjee, Act-On’s chief marketing officer, when IBM acquired Silverpop. “IBM acquiring Silverpop further validates the rapidly growing market and substantiates the industry as a whole. We are seeing an increasingly growing demand for marketing automation as companies are doing more online multi-channel marketing and moving beyond email. Corporate Darwinism is at work here in a fast-evolving market. The companies that remain standing are the hyper-growth ones with leading edge technology, or the behemoths that are scrambling to enter the market. This is a time of opportunity for marketing automation vendors to innovate and grow. The use of marketing automation has only scratched the surface, and we are in the beginning stages of a long and prosperous road."
In mid-April Act-On announced it secured $42 million in new venture financing. Technology Crossover Ventures (TCV) led the round, with existing investors Norwest Venture Partners, Trinity Ventures, US Venture Partners and Voyager Capital also participating. Act-On will use the new capital to accelerate its business on all fronts, including new product development, sales expansion and brand recognition.
“We plan to primarily use the money to build up our sales force,” Raghavan told eWEEK. “We need to grow our sales and marketing. We’re not constrained by market size but by the number of sales people we could hire. It’s also for geographic expansion. The way we sell will also change–we’re increasing the efficiency of social selling.
Raghavan said he also plans to double the size of the Act-On product team, including developers and engineers.
With a slightly different outlook than Frost & Sullivan, Raab Associates estimates the software automation market will increase 60 percent annually and is expected to reach $1.2 billion in 2014. Act-On grew at almost twice that rate in 2013 and expects this rate of growth to continue. Small and midsize businesses and departments of large enterprises have turned to Act-On to execute integrated, multi-channel marketing and lead nurturing campaigns.
"It is very exciting to see marketing automation evolving to move beyond tech companies, and getting broad adoption across all company sizes and industry verticals," said Raghavan in a statement. "We are the forefront of this movement. We have grown rapidly to over 2,000 customers now, but there are at least 200,000 companies in North America alone that are in our sweet spot. We are very pleased to have the backing of a long-term investor like TCV as we seek to take full advantage of this enormous opportunity."
The new $42 million investment is primary capital into the company to further fuel its revenue, customer and employee growth. In total, Act-On has raised $74 million since it was founded in 2008. Along with this new round of funding, David Yuan, general partner at TCV, joins Act-On's board of directors.
"Through an elegant product and a frictionless go-to-market model, Act-On has brought the power of marketing automation to small and midsize companies,” said David Yuan, general partner at TCV, in a statement. “This segment represents an enormous, green field market, and we're excited by Act-On's emerging leadership. We've been following Act-On for the past couple of years and look forward to working with the team to build a category leader."