Tuesday, April 15, 2014

Act-On Continues Momentum with $42 Million in New Funding

Today, Act-On Software announced $42 million in new funding led by Technology Crossover Ventures (TCV). TCV were investors in marketing software company ExactTarget, which acquired Act-On competitor Pardot and who itself was later acquired by Salesforce.com for $2.5 billion. This funding round brings its total capital raised to $74 million.

Act-On provides a cloud-based, integrated Marketing Automation platform targeted at small to medium sized businesses and departments of large enterprises.  Their tag line is “Marketing Automation for the Fortune 5,000,000", connoting that they are bringing Marketing Automation to the masses.

Act-On’s Founder/CEO Raghu Raghavan was the co-founder and CTO of the marketing solutions provider Responsys which was acquired by Oracle in 2013 for $1.5 billion.

Their technology includes an email engine with integration to web conferencing and CRM solutions; tools for website visitor tracking, lead scoring, lead nurturing and social media prospecting; design tools for web forms, landing pages and emails; inbound tools for SEO; Google AdWords tracking; and blog integration.

Act-On has experienced significant momentum, growing 215% from 2012-2013. Although the company has not published 2013 revenue figures, we estimate it achieved about $31 million. The company reports 2,200 customers and has 261 employees.

On Competition
Discussing how it will use its new capital in an interview with Venturebeat - “How fast we can grow is really about how much money I have to hire salespeople,” said Act-On CEO Raghu Raghavan, explaining what he plans to do with the money. “This is not a market where I have to fight competitors … marketing automation is still a greenfield market with only five percent penetration.”

While correct that their market is mostly greenfield – they are displacing email solutions and other point marketing products – they do have some strong competition. Based upon over 14,666 comparisons run by software buyers on TrustRadius in Q4 2013, they compete most commonly with Hubspot, followed by Marketo, Pardot and Infusionsoft.

 Marketing Automation Software Comparison Ring for Act-On
Based upon 21,437 page views and 14,666 comparisons on TrustRadius during Q4 2013

User Ratings & Feedback
Act-On is positively rated by its end-users on TrustRadius across all performance attributes:

Marketing Automation Average
Likelihood to recommend
Likelihood to renew
Product usability
Performance and reliability
Support rating
Training satisfaction
Implementation satisfaction

Source: (40) in-depth end-user reviews of Act-On on TrustRadius

Its strengths including its support, integration to Salesforce.com and usability. Areas for improvement include template/form customization, reporting and lead scoring flexibility.

Areas for Improvement
Customer Support
·         Support team is considered highly responsive and very effective at troubleshooting problems.
Template/ Form Customization
·         Difficult to make comprehensive changes to templates using the HTML editor.
Salesforce Integration
·         Integration is generally considered to be seamless and allows sales teams to prioritize based on lead scores.
·         Could be stronger – in particular, no way to share reports with others
·         Product is intuitive, particularly for email automation and landing page templates.
Lead scoring
·         Easy to use, but not very sophisticated.

Source: (40) in-depth end-user reviews of Act-On on TrustRadius 

Enterprise Aspirations
Today Act-On is very much a small business and mid-market oriented solution but they clearly have aspirations towards the enterprise. Based upon review mix on TrustRadius, we estimate that 53% of its clients are small businesses with <50 employees, and 35% mid-sized companies with 51-500, and 11% enterprises with >500 employees. In the case of large enterprises, it is typically used as a department solution. Again, from their interview with Venturebeat: “We’re coming at the enterprise bottom-up,”  “We tend to penetrate enterprise one division at a time, whereas Oracle, Adobe, and Salesforce take enterprise top down.”

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