Where will Venture Capitalists Make the Highest Investments in 2016?

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In 2015, venture capitalists (VCs) began investing heavily in companies that transform the way businesses communicate with their prospects and customers.

The market with the largest influx of investments from VCs is marketing technology. Why? Well, because the startups and companies playing in this space are helping businesses generate higher sales at lower operating costs.

Also, marketing tech firms offer services that are essential for competing in the digital age of advertising.

Why is marketing technology so hot right now?

According to Chiefmartec.com, the main components of marketing technology include efficiency and experiences.

Technology has come a long way in the past few years and now web-based platforms are being used to disseminate information to consumers around the world in a much more efficient manner.

The Internet and mobile devices are key places to advertise and enhance brand awareness, which is why middleware, platforms and operations are becoming more entwined in marketing plans.

su83nAlso, digital content in the form of infographics, videos, slideshows and blog posts are now much more effective means of compelling consumers to make purchases.

Areas of Investment

Marketing technology leverages strategy, technology and content to influence the path to purchase. And there is room for growth all across this spectrum, whether it's in marketing software, lead gen, demand gen, graphic design or collaboration tools.

SaaS platforms that integrate all of these elements into a scalable process are of particular interest leading into 2016.

According to Chiefmartec.com, $21.8 billion was invested in the following areas during 2015:

  • Marketing Middleware
  • Marketing Operations
  • Marketing Backbone Platforms
  • Marketing Experiences

As the market for marketing technology continues to grow, new areas for investment are inevitably going to emerge. For example, content marketing technology is in the midst of a huge growth spurt, as shown by platforms like NewsCred receiving $48 million in VC funding.

Potential for Growth

The Internet is here to stay, making technology a critical component of marketing strategies for businesses of all shapes and sizes.

The martech marketplace will continue to grow and evolve in 2016, carving out new niche offerings and unicorn startups all along the way.

Of course, as the Internet of Things (IoT) continues to evolve and become an increasingly larger part of consumers’ lives (hard to believe, we know), so too will marketing technology. Based on the trends in 2015, capital investments in marketing technology will only increase in coming years.

What is the moral of this story? Well, if you've ever considered entrepreneurship, now is the time to get in the game -- especially before the market becomes even more saturated with startups looking for some of that sweet, sweet VC funding.

Written by: Liz Farquhar

Liz Farquhar is the resident Content Strategist at List Partners Inc. and Winmo.

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