Count this as the biggest M&A win the Triangle startup community has had in years. Marketing automation software provider Bronto Software
, which employs more than 250 people in downtown Durham, will be acquired by NetSuite
for a whopping $200 million.
It is among the largest acquisitions the Triangle tech community has seen in 10 years. The Council for Entrepreneurial Development has confirmed it's the largest sale of a bootstrapped tech company in as much time.
For downtown Durham's American Tobacco campus, it counts as the sixth acquisition of a (once startup) tenant company in the last two years—Bronto follows in the footsteps of Digitalsmiths, Appia, Automated Insights (announced earlier this year
), Square One Bank and Two Toasters (announced earlier this month
Bronto Software already dominates the retail world with its marketing automation solutions, ranking as the top email marketing provider for Internet Retailer's Top 1000. Now it'll reap the rewards of having NetSuite as a parent. The public company based in San Mateo, Calif. provides cloud-based back office operations, e-commerce and point-of-sale, customer relationship management software and solutions to medium-sized and enterprise corporations and in 2014 was named a Most Innovative Growth Company by Forbes.
According to a press release, more than 3,000 retail brands use NetSuite's SuiteCommerce tools and the company has operations in 11 countries. Bronto has about 1,400 customers today and a presence in Europe (through a London office) and Australia (through a Sydney one). The acquisition will help the company expand its footprint around the globe. In an email to Bronto employees, customers and supporters, Bronto CEO Joe Colopy wrote the following:
What will be different is the scale and speed that Bronto can now execute as part of NetSuite. Bronto will be part of a multi-billion dollar company with an ability and willingness to invest in its growth.
NetSuite CEO Zach Nelson says the deal will make it possible for retailers to communicate to customers across platforms, writing in a press release:
"Just as customers demand seamless cross-channel shopping experiences, they increasingly expect companies to communicate consistently through all of their digital experiences—on site, at stores, in email or through social or mobile. By combining the two companies' offerings and technology, we can help merchants deliver relevant and consistent digital commerce experiences throughout the customer journey."
The move shouldn't be a huge surprise in marketing (MarTech) and advertising technology (AdTech) industries that are both growing and consolidating (and, some say merging) at
the same time. Spending by marketers on marketing technology is projected to hit $22.6 billion this year and grow 50 percent by 2018, according to IDC. Meanwhile, there are nearly 2,000 marketing technology companies today, up from 100 in 2011. And there's been nearly $22 billion invested in those companies.
In both advertising and marketing tech, experts predict M&A activity to continue to spike, rolling up disparate and related technologies into much larger companies. And niche one-stop-shop platforms, like eCommerce for example, may be increasingly common.
Bronto was founded in 2002 in the spare bedroom of Colopy's home with co-founder and COO Chaz Felix. The pair worked together at Red Hat—Colopy in online marketing and Felix in business development. Both received MBAs from UNC Chapel Hill—Colopy starting his career as a teacher in the Peace Corps and software developer at Harvard Business School and Felix in investment banking at Bank of America. The men are famous in the local tech community for taking no outside venture funding to fuel Bronto's growth over 13 years.
Both men and the rest of the leadership team will continue leading Bronto in Durham. According to Colopy's email, the company will operate as its own business unit within NetSuite. It will also get to keep its mascot, the green brontosaurus that keeps watch over American Tobacco each day.
More details will be shared by NetSuite in its first quarter earnings call
today at 2 p.m.
And check out the video above for Colopy's
comments on his company's banner 2014 and plans for 2015 (which at the time, may or may not have included an acquisition).