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Marketo Is Acquiring ToutApp

April 19, 2017, 9:59 PM UTC
Boom With A View by Erin Griffith: Media and Advertising
Illustration by Aleksandar Savic

Marketo, a marketing software company backed by Vista Equity Partners, has agreed to acquire ToutApp, a San Francisco-based sales software startup, Marketo confirmed to Fortune. ToutApp employees celebrated the deal at Southside Spirit House bar in San Francisco Tuesday night.

The price for the acquisition could not be learned, but sources told Fortune it would not produce a significant return for investors. The company had to “right size” some of its operations last year. The company’s annual revenue is between $5 million and $10 million in annual revenue and growing. ToutApp management will stay on after the acquisition.

Founded in 2011, ToutApp raised $21 million across five rounds of funding. Andreessen Horowitz led the company’s $15 million Series B round of funding in 2015.

Marketo CEO Steve Lucas, who joined the company in October, tells Fortune he approached ToutApp about a deal four months ago. The company plans to unveil the acquisition on Monday as part of a new “engagement platform” it will launch at its Marketing Nation Summit.

Lucas says this deal will “bridge the gap” between Marketo’s existing marketing technology offerings and ToutApp’s sales technology.

“Fundamentally what the marketer wants and needs is to be able to connect and engage with the sales organization,” he says. “Our ability to reach a massive number of the world’s biggest brands and extend the reach of this company we’re acquiring is fairly straightforward.”

It’s not the first time Marketo has tried to buy ToutApp, a source familiar with the situation said. The company initiated deal talks several years ago, but ToutApp was not interested in selling at the time.

Consolidation among marketing tech and advertising tech companies is expected to increase as venture capitalists pull back from investing in the categories in light of Google and Facebook’s perceived duopoly over digital advertising. Earlier this year, an advertising startup called Visible Measures sold for just $10 million after raising more than $70 million in funding. on Tuesday Oracle acquired Moat, an ad viewability startup, for an undisclosed price.

“It’s safe to say that our point of view, given there are 4,500-plus ‘mar-tech’ products alone, that the segment has to consolidate,” Lucas says.

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