In the last few years we’ve seen a dramatic shift in enterprise marketing and the skill set required to be a great marketer. At the core of this shift is marketing automation, which had its roots in email marketing and is now quickly encompassing many other pieces of the customer lifecycle. It’s no surprise then that Act-On Software – a marketing automation platform targeting the needs of the mid-market (the Fortune 5,000,000) – is growing at breakneck speed, boasting over 2000 customers, and today announced a $42M round of financing to further accelerate growth and capitalize on this enormous opportunity.
The conventional wisdom when Trinity Ventures led a $10M financing in Act-On Software back in the summer of 2011, was that the only way to build a meaningful company in the space was by selling to large companies and being focused on one functional area like email marketing or lead nurturing, since a broad platform would potentially dilute usability. The mid-market was perceived (wrongly) to be a minefield marked by high churn and unsophisticated marketers. In fact, I recall many conversations with folks who voiced these concerns at the time we made the investment in Act-On Software in 2011.
What the naysayers failed to recognize, and where we had strong conviction, was that the mid-market was a $6B opportunity that was largely neglected; that month to month contracts were part of a deliberate strategy to provide an excellent product experience and delight customers; and if you combine a powerful and easy to use product with a frictionless sales process and impeccable service, customers don’t churn even when given the option. These were the tenets upon which Act-On Software was founded and built and the core values that still define the company today. At Trinity, we believed in the company’s vision of being a single, unified, integrated marketing automation platform for the mid-market that combines inbound and outbound lead nurturing, leveraging web, mobile and social in one easy to use package.
Over the last couple of years, following the Trinity led financing, the company, founded by Raghu Raghavan (who also co-founded Responsys), has seen a 10x growth in both customer count and ARR by winning the hearts and minds of marketers in every vertical. The company’s continued success and growth is driven largely by its laser focus on the mid-market, which continues to be less than 10% penetrated. Further, the former skeptics are quickly realizing that these customers are, in fact, small/medium marketing teams whose needs are every bit as sophisticated as that of large teams within enterprises, and hence seek a complete and robust marketing platform. Act-On’s outstanding growth with best in class SaaS efficiency metrics has resulted in the team receiving multiple awards, including the most recent Frost and Sullivan’s entrepreneurial company of the year for 2014.
Trinity is proud to be a longstanding partner to the Act-On team and we look forward to many more years of enabling marketers to become rock stars within their organizations. On behalf of the board of directors, I’m also pleased to welcome TCV, who recognized the achievements of the company and the potential that lies ahead.
Finally, it’s worth mentioning that while Act-On’s tag line says, “Marketing Automation for the Fortune 5,000,000” it’s not lost on us that the Fortune 5 million does include the Fortune 500!
Congratulations to the team! Onward and upward!