According to a recently published report, the Global Digital Marketing Software Market is expected to grow 13% annually over the next five years to reach $77.4 billion by 2023. The growth is expected to be driven by the increased focus on personalized marketing and continued adoption of mobile devices. Billion Dollar Unicorn player Marketo is a leading player in the digital marketing segment.

Marketo’s Offerings

Marketo was founded in 2006 by Phil Fernandez who wanted to create a high-velocity SaaS company that focused on Lead Nurturing. Phil wanted to create a company that would democratize the CRM process and make an organization’s sales team at least five times more effective, and drive 40% growth in revenues through Lead Nurturing. He was convinced that Lead Nurturing is a scalable way of managing a lead and has a life starting from the date the marketer meets a potential customer till the time the customer is ready to buy.

Initially, Marketo did not have much to sell. But it attracted customers by providing high-quality content on blog posts, whitepapers, and research notes that motivate people to register and give the team their contact information. It followed content and social media driven marketing strategies even after the product was released.

Today, Marketo provides a complete range of marketing automation software solution that can be utilized by both SMBs and global enterprises. It calls itself a company that was built BY marketers FOR marketers. Its lineage has helped it design products that cater to all that a marketer needs to deliver more sales leads efficiently. Its services include inbound marketing, lead management, social marketing, event management, instant CRM integration, sales dashboards, and marketing ROI reporting and analytics.

Marketo’s Financials

Marketo was initially venture funded and it raised $108.4 million from investors including InterWest Partners, Institutional Venture Partners, Storm Ventures, Mayfield Fund, and Battery Ventures. It listed on the Nasdaq in 2013 by raising $75 million before being acquired in 2016 by Vista Equity Partners for $1.8 billion. During its short duration of being a listed company, the stock’s market capitalization had peaked at $1.9 billion.

Marketo has not disclosed its financials after being bought by Vista. But prior to the sale, the company had reported revenue growth of 30% to $66 million for the quarter ended June 2016. For the period, GAAP net loss came in $20.8 million, or $(0.46) per share. Non-GAAP net loss was $0.1 million, or a breakeven quarter. By segment, Marketo’s subscription services were trending at revenues of $57.8 million for the quarter and professional services brought in $8.3 million. Marketo had ended fiscal 2015 with revenues of $210 million and a GAAP net loss of $71.5 million.

Marketo’s Acquisition

Overall, the SaaS marketing solutions market had been witnessing a consolidation. Prior to Marketo’s acquisition, some of the other big acquisitions in the industry included Oracle’s purchase of Eloqua and Responsys, Salesforce’s purchase of Exact Target, IBM’s acquisition of Silverpop, and Adobe’s purchase of Neolane. In fact, Marketo had earlier received bids from both Oracle and Salesforce, which it had declined. It wanted to remain independent. Vista Equity Partners became the eventual buyer by pledging its $5.7 billion fund as collateral, and by paying a 64% premium over the traded market price for Marketo at the time of the acquisition.

Vista’s acquisition was driven by its growing focus on enterprise SaaS offerings. Vista has made several other big budget tech buys including names like Ping Identity, Datto, Xactly, and Applause to name a few. Unlike some of its other acquisitions though, Vista has let Marketo operate more independently. Besides the premium, Marketo had agreed to become private, once again, so that it could focus on the development of its platform.

Marketo’s Growth

Meanwhile, under the new ownership, Marketo has continued to grow. Recently, it announced the integration of its platform with enterprise messaging service Slack. The integration will empower Marketo users to communicate and collaborate to engage their customers at the right time. The joint solution will provide real-time notifications about customer engagement and will help companies build the pipeline and ultimately drive revenue.

Last year, Marketo also announced the acquisition of sales engagement platform ToutApp. ToutApp provides sales teams with sales campaign, content management, and analytics software that help them engage prospective customers in a personalized way to drive revenue growth. Together, the two plan to deliver tools that will empower sales and marketing teams in the Engagement Economy.

Questions for Marketo’s Board

You may have read my recent commentary SaaS Companies: You Have an Unprecedented Opportunity where I lay out the hyperactive entrepreneurial scene in SaaS around the world. MarTech has been one of the most prolific of these segments. I am sure Vista is looking to use Marketo as a trunk around which to do a comprehensive roll-up of MarTech SaaS companies. It’s a very interesting investment thesis.

The question is, what process and what narrative is the company following to align both internal and external innovation to create a compelling billion dollar revenue company in the foreseeable future?