Marketo, Rocket Fuel for Sales, Lands $50 Million From Battery Ventures
The investment is a Series F, with prior investors Institutional Venture Partners, InterWest Partners, Mayfield Fund and Storm Ventures also participating. Neeraj Agrawal, a Battery Ventures general partner, will join Marketo’s board of directors.
Marketo CEO Phil Fernandez told me that he hadn’t been on the hunt for more funds. But recently he and his board decided to open the door to investors just a crack, and suddenly had many venture capitalists knocking. “The opportunities we’re seeing are just huge, and we decided to take an investment and grow the company,” Fernandez told me yesterday. “I’ve had a continuous stream of investors over the last year.”
Agrawal, in particular, had been interested in investing since early this year, and persistently kept in touch, Fernandez said. When the opportunity came, he jumped.
The investment, Fernandez says, gives Marketo a $70 million war chest that he intends to use to bulk up his team. “It gives us some working room to make some investments, to do some international expansion.” When I talked to him yesterday, he called from London, and said the new money will help fuel expansions into Latin America and Asia.
So what does Marketo do? It helps companies find and track sales leads and prospects using social media, the Web and in-person contacts at events like trade shows, in order to identify customers who are ready to buy — or, as Fernandez says, “the hottest of the bunch.” There’s also a set of analytics tools that helps companies sift through the many threads of data related to making sales and keeping customers. “It helps companies to understand how and why they’re growing, and then how to accelerate that growth.”
So far, Marketo has 1,500 customers, including eBay unit PayPal; McKesson, a $112 billion (2010 sales) health IT concern; and Rackspace, the Web- and cloud-services hosting provider. Those customers are hungry for more new products and services, Fernandez says, so more products are on the way. “We have three products, and a fourth cooking away in the oven,” he says.
Sales were in the ballpark of $14.5 million in 2010, and Fernandez says he’s on track to more than double that this year, which implies sales in the mid-$30 million range, all of it recurring revenue. He says he thinks he can grow it by 100 percent again into 2012.
Also: Acquisitions. Fernandez wouldn’t name any targets — who would? — but he did say he’s got some names in mind. “There’s an awful lot of innovative little companies out there that have a great product, but maybe didn’t build the same successful channel that we did,” he says. “So there’s a good chance to quickly monetize some products that we would acquire. We’re hot on the trail.”
Finally, Fernandez says Marketo is starting to mull an IPO. He’s not in any rush, and hasn’t hired any bankers yet. “We’re pretty aware that if we keep growing the way we have, we’ll be in a place where we can go public if the markets are open, so, we’re thinking about it.”