What BlueVenn's Sale Means for the CDP Market
This week brings news that longtime Customer Data Platform (CDP) vendor BlueVenn has sold itself to enterprise software aggregator Upland.
Subscribers to RSG's CDP vendor evaluation research know BlueVenn as a plucky vendor that has seen modest success in the low- to mid-tiers of the CDP market in some regions and sectors. It also suffers from technical and user experience debt we thought was pretty significant. The Bristol, UK-based firm is a comparatively small CDP vendor, if not in head count (~115 including some consulting acquisitions), then in venture funding ($10m) and annual revenues ($15.5m). So the owners seem to have exited quite nicely after selling to Upland for about $55m.
But does this tell us much about the CDP market as a whole? I don't believe so.
Firms like Upland target mid-tier software vendors that possess loyal customer bases but never took off and — facing revenue plateaus — are ripe for restructuring and economies of scale. Other aggregators like Verint and (more up-market) OpenText play a similar role in the wider software ecosystem. They acquire firms, consolidate staff, reduce R&D to the minimum, and reap profits. They give lip-service to integration and modernization but it's fundamentally a financial play.
Upland previously acquired CMS vendor Clickability in the mid 2000s and more recently Email Service Provider Adestra. While some licensees of both solutions mourned staff turnover and other turbulence, Upland has been a decent steward of these tools, and I suspect BlueVenn licensees can expect the same. Prospective buyers of a new CDP solution should exercise caution here, however, and drive a very hard bargain, even if BlueVenn was already competitively priced.
The CDP Market
The rise and evolution of BlueVenn suggests there is a decent place for reasonably-priced, simpler solutions that — however lacking in depth — bring some feature breadth and industry-specific expertise in certain segments. I think you will see other CDP-less software firms purchase other independent CDP players going forward. The sheer number of CDP vendors potentially open to an exit will get balanced by some sticker shock when buyers face high multiples for any acquisition. At RSG we expect a flow of M&A deals and not a stampede.
What I do not think you'll see is a wholesale consolidation of the CDP market into dramatically fewer choices for you the buyer. Every quarter we add a CDP vendor or two to RSG's platform evaluation research. Amid poor competition from the major MarTech players, the CDP market is likely to remain quite fragmented, well into this decade. So assess your choices accordingly and try to get the best possible fit for your specific needs.