Marketo IPO may spark suitors, including Salesforce.com
Analyst: SAP and Adobe are among other vendors who seek to buy the marketing automation software vendor
IDG News Service - Cloud-based marketing automation vendor Marketo's plans to raise up to $75 million in an initial public offering, which were revealed this week, could influence larger companies to acquire the company, including Salesforce.com and SAP.
While Salesforce.com gained some social marketing capabilities through its acquisition of Buddy Media, for broader-based marketing capabilities it has relied on partners, including Marketo.
In turn, Marketo relies heavily on Salesforce.com, according to its S-1 filing on Tuesday with the U.S. Securities and Exchange Commission. "As of December 31, 2012, approximately 79% of our customers integrated our solution with certain capabilities of Salesforce.com using publicly available application programming interfaces (APIs)," it states. "In general, we rely on the fact that Salesforce.com continues to allow us access to its APIs to enable these customer integrations."
While Marketo is integrated with other CRM vendors, such as Microsoft, Oracle and SAP, it gains most of its revenue from Salesforce.com, according to the filing.
Salesforce.com has been seen as reluctant to acquire similar capabilities for fear of alienating Marketo and similar partners. But it has also stood back and watched as one Marketo competitor after another has been scooped up for handsome sums.
These moves have left Marketo and a handful of peers, such as Silverpop and Neolane, standing as independents.
Marketo's IPO could spur Salesforce.com and other vendors to seek an acquisition, since IPOs, if successful, can create serious buzz around a company. IPOs also set a market price for a company's stock, helping bidders come up with an attractive offer.
It's not without precedent in the marketing automation world, as Oracle bought Eloqua just a few months after Eloqua filed for an IPO of its own, Neolane CEO Stephane Dehoche said via email. "If the Marketo IPO is considered a success, you could assume that could drive additional interest from suitors," he added.
Marketo's S-1 filing didn't include an initial share price, but potential suitors gained other insights into its financial performance. For one thing, Marketo's revenue more than quadrupled between 2010 and the end of 2012, rising from about $14 million to $58.4 million.
However, like many startups, Marketo is running in the red as it ramps up the business. The company lost $34.4 million in 2012, a year in which it spent $37.8 million on sales and marketing efforts.
Marketo stands at a crossroads of sorts, according to one industry observer.
"Marketo's at a size where being an independent for the next two to three years is a viable option," said analyst Ray Wang, CEO of Constellation Research.
- Path Selection Infographic Path Selection Infographic
- Hyperconvergence Infographic A wide range of observers agree that data centers are now entering an era of "hyperconvergence" that will raise network traffic levels faster...
- Preparing Your Infrastructure for the Hyperconvergence Era From cloud computing and virtualization to mobility and unified communications, an array of innovative technologies is transforming today's data centers.
- Increase IT Performance from the Enterprise to the Cloud with WAN Optimization Massive consolidation and data mobility, enabled by virtualization, have radically altered how we build servers, design applications, and deploy storage for the emerging...
- Live Webcast
Transforming Finance, Procurement and Supply Chain Effectiveness with Cross-Functional Analytics
Date: May 6th, 2014
Time: 1 PM EDT
Attend this Webcast to find out how Oracle's packaged analytic applications enable line-of-business managers to examine all...
- Video Stream Quality Impacts Viewer Behavior This scientific white paper, using statistical data from Amakai's streaming network, analyzes how changes in video quality cause changes in viewer behavior.
- Service-Enabling CICS Applications: Best Practices This informative webcast provides an informed, thorough look into CICS service-enablement options and how they can affect your environment. You'll learn how to... All Applications White Papers | Webcasts