By Adam Fraser
It’s been quite a year for fundraising in the enterprise social media software space.
I have discussed previously the deep, broad and complex marketing technology landscape. Almost 2,000 vendors across 43 categories. “Social media marketing” is just one of these categories but even it has its own living and breathing sub eco-system.
I often dissect the social media software market into verticals such as:
- social listening (think Brandwatch, Netbase, Radian6)
- social analytics (think Simply Measured, Social Bakers)
- social customer service (think Conversocial, SparkCentral)
- end to end social media management platforms (think Tracx, Sprinklr, Hootsuite)
There are of course many (many) other niche execution tools which help with listening or publishing on one or many social platforms (think Thunderclap, Tagboard and SocialBro to name just a few).
So as with the entire marketing technology landscape, the social media technology landscape is also deep and broad. There has been a massive investment of funds into marketing technology more broadly but the investment trends within the social media sector are interesting.
Venture capital and private equity investors expect growth, a return higher than the stock market and a path to an exit. Implicit in their investments is confidence in the enterprise social media space and obviously the specific business they are backing.
Some investors are betting that, increasingly, larger enterprises will seek one end-to-end platform to manage their social media activities, all the way from listening, through to publishing, analytics and customer service, rather than integrating a number of ‘best of breed’ verticals.
In the last couple of months, enterprise social platform Tracx raised $18m from Edison Partners and social marketing platform Spredfast raised $24m from Silver Lake Waterman. This comes less than a year after social management platform Sprinklr raised $40m from ICONIQ and social relationship platform Hootsuite raised $60m from a range of investors.
These are just a few examples but they highlight the key take-out – professional investors believe social media technology to be an ‘investment grade’ sector worthy of significant investment. It’s a sign of the maturation of the industry. We have come a long way from the “You should have a Facebook page” view of social media for enterprises.
Whether end to end platforms or best of breed verticals come to dominate within social technology will be an interesting topic to observe over the next 24-36 months. Mergers and acquisitions will also start to play a part in the landscape as some level of consolidation in a crowded market seems inevitable.
The battle lines have been drawn and people have made their bets. There will always be winners and losers, but the social media technology sector as a whole is healthy, growing and growing up.