Lead Generation Companies | Analysis of marketing automation space - great guest post
Our goal is to share great guest posters. Here we feature the marketing automation experts at Software Advice. We thank them for their contributions here.
SoftwareAdvice does great analysis of the marketing automation space. Their recent post is a superb analysis of the marketing automation industry. I post part of the article below. Click the link at the bottom to read the full article.
I really like Lauren’s candid and unabashed analysis of the space. (but I also added Hubspot to the analysis) Also, Lauren shared with me that she got this data from sites like IRS.gov and venturefunding.com, as she was striving for unbiased, objective information and to avoid vendor bias.
Jeff Ogden, President, Find New Customers
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by Lauren Carlson, SoftwareAdvice
I’ve talked to a lot of marketing automation vendors in the last year, and the topic of venture capital comes up often. Some vendors are proudly announcing new rounds, while others are deriding the fundraising as reckless and unsustainable.
I’m not exactly a Silicon Valley insider, so I decided to dig a little deeper into the topic.
On one end of the spectrum, you’ve got Marketo, (Jeff - our great white paper, How to Find New Customers, was sponsored by Marketo) which has raised $58 million to-date and $35 million of that in the last twelve months. They position these venture rounds as validation of their momentum in the market. They say the capital will be well-spent on product development and building an enduring company. Time will tell, but they seem to be doing very well.
On the other end of the spectrum are a dozen or so vendors who claim to be struggling with the VC math.This creates questions:
- Why do you need that much money to build a software company?
- Does it really cost that much to acquire a new customer?
- Wouldn’t a more “organic” approach to corporate development make sense?
VCs invested over $3.96 billion in marketing automation vendors since 1998.

While marketing databases, data mining, and campaign management tools have been around for decades, the modern marketing automation market really started attracting venture funding during the dot com era (1). Of course, that bubble burst and there was little funding for a few years (2). However, activity picked up in a big way in 2005 as the economy recovered and investors became smitten with all things cloud (3). The financial crisis of 2008 and 2009 slowed funding again, but that was short lived (4). 2010 saw the largest flow of dollars into marketing automation vendors, including two sizable rounds by Marketo (5).
Jeff: Though Laura did not discuss Hubspot, I calculated that they raised $65MM in four rounds, including $32MM in a recent D round. The chart below, from a recent Hubspot blog post, shares their view of the marketing.
Take it with a grain of salt - is 50% market share by revenue or number of customers? (To illustrate - which company has higher market share? Company A has 1,000 small customers and company B has 600 big ones. Depending on what you measure will put either company on top.)

To Read more: http://www.marketingautomationsoftware.com/blog/marketing-automation-venture-funding-1051111/#ixzz1M4g9Kxy8
Thank you for an extremely interesting and cogent analysis, Lauren.
What do you think? We love comments and sharing.
Jeff Ogden (@fearlesscomp) is President of the B2B lead generation consultancy, Find New Customers.
We help companies with between 150 and 5,000 employees who sell complex products to businesses to implement world-class lead generation programs. As companies struggle to create quality sales opportunities, they turn to lead generation companies like Find New Customers.
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