B2C marketing cloud Emarsys takes on $33M Series A, primed for rapid expansion

Emarsys, an all-in-one marketing cloud for predictive marketing, personalization, analytics, and marketing automation today is announcing a $33 million equity investment from San Francisco-based Vector Capital. Emarsys has more than 500 employees serving more than 1,300 clients in 140 countries from 16 global offices. The funding will be used to further develop the platform and allow for a full operational buildout of teams in the U.S. and Latin America. It’s the first investment in the company’s fifteen-year history.

Emarsys, under CEO Hagai Hartman, has grown 10X over the past five years without a VC investment, a “rare accomplishment in SaaS [Software as a Service]” according to Matt Blodgett, managing director at Vector Capital.

So why the big round now, so late in the company’s history? By studying marketing technology, we’re able to point to a few clear market conditions that show why marketing tech is so hot with VCs right now.

Massive shift in technology spend to CMOs: The numbers being reported should be taken with a grain of salt. But, as Blodgett told me in an email interview, CMOs have become the “belle of the corporate technology ball.” As marketers continue to own more customer interactions in multi-channel, real-time environments, CMOs are being pushed to assume new platform responsibility.

CMOs’ changing role as customer experience agent: Today, you can throw a rock in a corporate marketing meeting and hit three people talking about “customer experience.” This is increasingly falling under the CMO’s domain (call-center and tracking, customer feedback, real-time business insights and analytics). Emarsys’ focus on personalized customer interactions “perfectly aligns with this shift,” according to Blodgett.

Lifetime value  > customer acquisition: Particularly for B2C, the types of customer data being made available to marketers allow for smarter expenditure of efforts on retaining existing customers rather than acquiring new ones. Most B2C marketing budgets focused on lead gen and customer acquisition are unprofitable and extremely difficult to track accurately. Blodgett said, “What generates profits for B2C companies — whether it is ecommerce, retail, travel, gaming, Internet — are repeat and loyal users and buyers.”

Emarsys CEO Hagai Hartman said companies have always used personalization to create long-lasting and profitable relationships with repeat buyers. They just haven’t had the technology to support it at scale. Hartman took retail as an example: “Before technology and the Internet, retail was custom and local — your favorite shops knew what you liked and would inform you. After technology, retail became mass and convenient — but the price of the scale was the loss of the personalized nature of shopping.”

Emarsys can support the ‘mass’ nature of online shopping but with a custom feel informed by capturing data from past behaviors and machining that data into marketing campaigns.

As Blodgett put it, Emarsys might be the “best kept secret” in marketing technology — with its “uniquely integrated BI, personalization, predictive analytics, marketing automation, and highly scalable messaging capabilities — all operating in a real-time global scale.”