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The round was led by Technology Crossover Ventures, and brings Act-On's total raised to $74M
Getting people to use a product online has evolved well past the days of simply e-mail blasting someone to get them to sign up or take advantage of a deal. There are multiple platforms that can be used, including social media and mobile, which have allowed even smaller companies to run successful campaigns without knowing anything about technology
Marketing automation provider Act-On Software is on the forefront of that movement, and it has now raised $42 million in new venture financing, it was announced on Tuesday. The round was led by Technology Crossover Ventures, with existing investors Norwest Venture Partners, Trinity Ventures, US Venture Partners, and Voyager Capital also participating.
Act-On had previously raised $32 million, most recently raising $16 million in Series D funding from Norwest Venture Partners. Voyager Capital, Trinity Ventures, and the US Venture Partners in September of 2012. The company has now raised a total of $74 million.
Founded in 2008, Act-On is marketing automation provider that focuses on small and mid-market enterprises. The company powers lead generation and management, helping businesses generate leads through multiple channels, including email marketing, social media sites like Facebook, LinkedIn and Twitter, as well as webinars and mobile apps.
Act-On helps boost ROI through demographic and behavioral data that increases engagement throughout the customer lifecycle, reduces the cost of acquisition, and strengthens loyalty.
"We are the next generation of marketing software that is just starting to roll out and be broadly accepted," Raghu Raghavan, CEO of Act-On Software told me in an interview.
Raghavan compared what his company is doing now to the adoption of e-mail marketing a decade ago, which he said started out a "novelty" before becoming accepted.
"We are the next wave. Online marking not just about email," he said. "Companies want an educated view of their website, one that will help turn visitors into prospects that interested in what you have and then into customers."
It can help that visitor into a customer in a variety of ways.
For example, a company can know, by the looking at the IP address, is a person has come to a their site multiple times. Knowing that that person is likely to become a customer, the site can begin presenting them with customized content that is not shown to other visitors, such as white paper reports.
When the customer goes to download that report, the site may ask them to sign up for their mailing list by providing their e-mail address. The company can then invite that person to a webinar and turn them into a customer.
In other cases the owner of a website may simply see that many of its visitors are coming from a certain company. While that website would not be able to see the individuals who visited, it may use that information to reach out to the company and turn it into an enterprise customer.
Another example can be using Twitter's keyword targeting tool, which it introduced last year, to find people who are looking for certain services or software. The company can then tweet them to come to an event or visit their website.
While marketing automation is growing quickly, increasing 60% annually and expected to reach $1.2 billion in 2014 according to Raab Associates, the space is still relatively small, Raghavan said.
In fact, there are only a few other companies even doing the same thing, including Marketo and HubSpot, and only around 25% of Act-On's 2,200 customers are even looking at its competitors, while the other 75% are still either using e-mail platforms, or earlier generations of marketing solutions.
Act-On will use the money to build out its sales and marketing team, as well as to grow its product team. The company, which currently employs around 270 people, plans to hire another 100, with roughly 60 of those going toward the sales department in multiple locations, Raghavan told me.
It will also go toward product development and brand recognition, but it will also, "puts nice value on our stock, which we will use as currency for doing acquisitions."
The Portland, Oregon-based Act-On has been doubling revenue year to year. The company has also been increasing its customer base, which it expects to hit 3,000, if not 4,000, by the end of this year. It has been adding between 250 to 400 customers every quarter.
(Image source: press.act-on.com)
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