The data and mar-tech deals march on.
Midmarket private equity firm HGGC, which groomed hybris into a $1 billion-plus acquisition target for SAP, is the latest. The firm revealed Friday it has invested an undisclosed amount in European marketing-automation and data-management solution Selligent. Investment bank The Jordan Edmiston Group advised Selligent on the transaction.
As a result of a recapitalization of equity, HGGC will gain a majority stake in the company, which is used by 450 brands that include midmarket and enterprise retailers and financial services firms.
Hudson Smith, a principal at HGGC, noted the firm’s interest in Selligent stemmed from its ability to help personalize offers for marketers without costly IT expenditures.
Selligent was cited as a “niche” player in Gartner’s breakdown of multichannel campaign-management platforms this year, a category dominated by larger makers of marketing clouds like Adobe, Oracle, Teradata and Salesforce.
Selligent focuses on digital channel executions and allows a marketer to unify their CRM profile and behavioral data, and then augment third-party transactional data to enhance it, according to Gartner.
“We absolutely compete against pure-play marketing clouds like Adobe, Oracle and Salesforce.com,” said Nicholas Worth, Selligent’s CMO, who added a caveat that “the difference is we are nimbler and are more affordable to marketers. We offer a full range of capabilities without the overhead that comes along with it.”
Selligent positions itself as an omnichannel audience “engagement” platform.
This technology breed doesn’t fit the bill of a traditional marketing automation system, whose specialty was email. Selligent is an email service provider, but built a targeting module for web-based, mobile, social and call center interactions, as well as site optimization.
And while Selligent doesn’t self-identify as a data-management platform, it does integrate to DMPs and expects data-management capabilities to grow in importance with marketers.
Worth said HGGC’s strategy for taking “a highly effective technology born in Europe, roll it out globally and find a fit in the US (aka hybris)” was attractive to Selligent.
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Although Selligent has great product potential and good customers, it lacked the funds necessary to fuel product growth, sales and marketing on its own, said Ray Wang, chairman and principal analyst of Constellation Research.
“The challenge for European-based startups is not having investors betting on growth when challenging West Coast VCs,” he noted. “Most have PE formulas that sacrifice growth for margin. That’s a surefire death trap that limits the ability to capture the mindshare needed to win. HGGC isn’t often seen as a growth shop, so this will be Selligent’s long-term challenge.”
Tolman Geffs, co-president at The Jordan Edmiston Group, told AdExchanger the deal involved no debt, just equity, and that HGGC structured the agreement to leave more cash on the balance sheet and prime the pump for growth.
“It’s the second time we have sold a software business to this group, and I can tell you they are definitely growth investors,” Geffs said.
Updated with details from investment bank.
