Ecommerce marketing company Rokt announced its acquisition of customer data platform mParticle for $300 million on Thursday. The deal is framed as a merger, but Rokt is taking a 100% stake, as confirmed by Bruce Buchanan, Rokt’s co-founder and CEO. The acquisition is somewhat unexpected, given that both companies operate in the ecommerce marketing sector.
Rokt recently acquired AfterSell, a post-purchase customer experience and upselling service for Shopify merchants, which aligned well with its focus on serving ads and offers on retailer and media subscription post-purchase pages. This strategic move aims to enhance Rokt’s service beyond advertising and deepen its ecommerce marketing capabilities. More than 90% of Rokt’s and mParticle’s client bases consist of enterprise retailers and brands that spend over $5 million per year on each company’s software.
Buchanan noted that Rokt’s performance saw an increase of up to 50% when their clients also used mParticle’s services. mParticle provides a live feed of data, which is crucial for Rokt. Retailers use both platforms for customer retention and to grow loyalty or credit card programs.
Michael Katz, mParticle’s co-founder and CEO, will remain in his role post-acquisition. Katz emphasized the importance of getting closer to the value creation layer to continue the company’s mission as a customer data platform. The customer data platform (CDP) sector has seen significant consolidation in recent years, with big players like Oracle and Salesforce making acquisitions.
Recently, other independent CDP vendors like ActionIQ and Lytics were acquired by Uniphore and Contentstack, respectively. Buchanan indicated one challenge for CDPs is justifying investments in data services and integrations which don’t directly involve ad targeting or bid decisioning. He highlighted the importance of recognizing true value to fund necessary investments.
Rokt strengthens data capabilities with mParticle
Rokt understands the value brands attach to real-time data that can convert customers immediately. In summary, Rokt’s acquisition aims to enhance its service in the ecommerce marketing domain by leveraging real-time data capabilities to improve customer engagement and retention strategies.
This acquisition is part of a broader trend in the ad tech industry, which has seen multiple notable acquisitions recently, indicating continued consolidation and strategic expansion among companies seeking to enhance their digital marketing and data capabilities. In addition to the merger, Rokt announced a $335 million stock purchase agreement from investors including Tiger Global Management, Square Peg, Barrenjoey, and SecondQuarter. The infusion of funds, known as a secondary transaction, will be used to invest in Rokt’s artificial intelligence and machine learning technologies, which have already seen significant investment.
Buchanan noted that Rokt’s “customer relevance machine,” called Rokt Brain, improves ad relevance by 28%. Rokt plans to invest $50 million in mParticle’s product roadmap to further develop Rokt’s offerings, according to Elizabeth Buchanan, chief commercial officer at Rokt. The merger represents a consolidation between martech and data management platforms, a trend expected to continue, according to Aaron Fetters, CEO and managing partner of marketing consultancy Transparent Partners.
Fetters noted that the merger could help clients better understand customer behavior, leading to more effective ad targeting. Founded in 2012, Rokt has seen substantial growth in recent years, with a client portfolio that includes Albertsons, AMC Theatres, HelloFresh, Hulu, Live Nation, Macy’s, PayPal, Staples, and Uber. Similarly, mParticle, founded in 2013, has been a pioneer in the customer data platform space and works with brands like HBO Max, Marks & Spencer, JetBlue, and SoFi.
As part of the merger, mParticle’s founders will join Rokt’s executive team. Michael Katz will continue as CEO of mParticle, Andrew Katz will become chief technology officer of Rokt, and Jason Lynn will remain chief product officer of mParticle. “I see a clear value proposition for mParticle clients and am interested to see how Rokt’s existing advertisers will benefit,” Fetters said.
Consolidating data and ad platforms minimizes data hops, allowing advertisers to extract the full value of their data.”
Founded in 2012, Rokt has grown its revenue tenfold in the past six years, the company said.
