Does a cluster of new startups indicate something is stirring in B2B martech, and that we're about to see a new wave of innovation?
Is something stirring in B2B martech? The post Covid world has not been kind to the once-booming B2B martech category, with interest rates felling the ‘magic money tree’ provided by PE backers, but also a more mature attitude ensuing amongst buyers who recognised that less-is-more is the best approach to optimising your tech stack. From my perspective at least, the glory days or B2B martech, where there was a steady stream of vendors with deep pockets striving to grow as fast as possible, seemed long gone (with a couple of obvious exceptions).
But then all of sudden I find myself in conversation with a handful of early-stage martech vendors – Demand Genius, Launched and Reelflow – and I also bumped into the former CMO of a global tech brand who has also become involved in a martech startup, and is currently looking for funding. And my good friend Maureen Blandford is building momentum with her Serendipitous offering.
These vendors are all early stage or startup, but it’s also mentioning Funnel Fuel in this conversation, as they are arguably the poster-child of B2B martech/adtech new player, having made great strides in the digital advertising world in a very short space of time (and threatening to move into other areas) guided as they are by the ‘dream team’ of Paul Collier. Dan Shaw, Mark Burton and of course Kevin Flood. In a broadly similar vein, Adzact have repurposed and reorientated themselves from an insight specialist to being more focused on this digital advertising world.
What’s interesting about the companies listed here is that they are all UK-based – historically the UK has been something of a poor-relation when it comes to martech, with Silicon Valley providing a production line of new martech offerings, boosted by that perfect ecosystem which included a steady stream of graduates from Stamford, a knowledgeable and tuned-in VC sector, and a bountiful supply of both in-role expertise and ambition based on. Industries cluster for a reason.
I’m certainly not suggesting that the West Coast’s role in martech development is over – the doyen of the martech sector, Jon Miller, for remains very visible and I’d suspect will announce a new venture any day now - but it’s interesting that the UK or perhaps London specifically seems to have emerged as another hotspot. Why is this and why now? That was the question I posed to Tom Rudai of Demand Genius, when I met with him recently for a coffee – he suggested there may be two factors driving this: 1. That founders of this new wave include individuals who were made redundant during the post-Covid downturn, and have invested their settlements (and ambitions!) in these new ventures, and 2. That AI has cut cost, time and complexity from coding, meaning that individuals with an idea can get to the start line much more easily, at least for discrete or highly targeted solutions.
Exciting and interesting as this new clutch of startups is, I’m also not suggesting that it changes anything fundamental about what a good martech stack looks like – as Adam Sharp would say, it needs to have a strong spine and for functional duplication to be minimised or avoided altogether if possible. (I’m sure Adam and indeed Proplis’s own resident expert Karla Wentworth can elaborate here on what constitutes the right martech stack).
But tactical or point solutions will always be necessary and as buyers’ expectations and needs evolve, so will martech. Startups and niche players are uniquely positioned to drive innovation, are inherently nimble and responsive in a way that consolidated vendors are not and it is exciting to see a fresh wave of these arriving addressing different challenges and unencumbered by some of the challenges faced by the previous wave.
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