On April 2, 2014, social relationship platform Spredfast announced that it had merged with content curation platform Mass Relevance. I spoke with CEO Rod Favaron about the deal and what it means for the rapidly changing marketing technology space.
The facts
- The new company will be called Spredfast
- Mass Relevance stock will be converted into Spredfast stock
- Spredfast has 200 employees and Mass Relevance has 150 employees; both companies are headquartered in Austin, Texas
- Spredfast has raised over $60 million in venture capital funding and Mass Relevance has raised just under $6 million; both companies have Austin Ventures in common as an investor
The companies have at least a half dozen common clients and they had already been working on integration pathways between the two solutions. So this deal is good news for 1% of the new firm’s client base and great news for the Spredfast sales team that now has over 600 new cross-sell opportunities.
But what exactly is this thing?
My take is that it’s a bit different than what I’ve been hearing from the massive marketing cloud vendors (Adobe, Oracle, Salesforce), that are focused primarily on integrating owned content across digital marketing channels.
In contrast, Spredfast is focused primarily on earned content, allowing “marketers to display [social media] content on every screen that matters, whether scheduled or unscheduled.” Mass Relevance helps brands curate the social web outside-in; Spredfast enables brands to publish owned content inside-out. The combined company enables content discovery, optimization, and distribution.
A content marketing platform powerhouse
My take: Spredfast has just created a formidable solution in the white-hot content marketing space. There are players here including Percolate and RebelMouse, potentially Sprinklr (+Dachis Group), and segments of the big three Marketing Clouds. One big advantage Spredfast may have over other firms is Mass Relevance’s native access to the full Twitter firehose, which has allowed it to make huge inroads with major media companies.
Favaron tells me that Spredfast intends to become a consolidator in the marketing technology space — which means the company needs to raise capital via a new funding round or IPO. In the case of the latter, given the amount of funding taken so far, the company’s valuation would need to be close to unicorn club territory to make sense. (Which, by the way, is not too far off from where Sprinklr stands financially as well.)
A native advertising play
Even if Spredfast gains access to a huge amount of capital, competing head on with the likes of Adobe, Oracle, Salesforce, and SAP may not make much sense given the headstart the others have on integrating broad marketing cloud solutions. Instead, the firm might decide to double down on its strong installed base of media clients and own the market for a new breed of native advertising solutions, combining large broadcast networks with major brand advertisers and user-generated content.
This way to the egress
I’ll be keeping an eye on how competitors respond, especially Hootsuite which raised $165 million last year and acquired analytics firm uberVU last quarter. All firms remaining in the SMMS space need to map out a path to the exit because it’s clear that standalones won’t survive much longer.