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All hell is breaking loose in CDP land
Many people have predicted in the past that the CDP would be unbundled. But are the recent acquisitions of ActionIQ, Lytics, and mParticle a sign that struggling CDPs are instead destined to be re-bundled into tangential Martech platforms?
Remember when I predicted that CDP vendors would vacate the category en masse two weeks ago in TMW #207 | Martech predictions for 2025?
Expect lots of change in CDP land in 2025. Plenty of vendors will be acquired and re-positioned โย or will re-position themselves. For the sake of survival, many will need to get out of the CDP category. Some sadly just wonโt make it and will be sold for scraps.
I know all too well that even a broken clock is right twice a day, so I wonโt claim that Contentstackโs acquisition of Lytics and mParticleโs merger with Rokt are definitive proof that Iโm some sort of Martech prophet, but it is nonetheless a demonstration of the harsh realities of the CDP category in 2025.
Both Lytics and mParticle are OGs of the category. Both were founded in 2013 before CDP became a popular concept. In every category there are a handful of vendors who claim to have coined the category name, but Lytics CEO and founder James McDermottโs assertion to have done so since his companyโs inception is about as good as any other vendors.
But being one of the first into the category wasnโt enough for Lytics or mParticle to continue on its own, with both acquired by tangential Martech platforms, respectively Contentstack โ a Digital Experience Platform (DXP), and Rokt โ an ecommerce platform.
The price and terms of the Lytics acquisition havenโt been made public, but the company last raised funds in 2019, bringing its total funds raised to $58M; thatโs both an Aeon ago and peanuts in the competitive CDP category (for comparison, Klaviyoโs total funding is $778M).
According to LinkedIn, the companyโs headcount has been shrinking steadily for the last two years, and even these numbers are likely inflated, as GeekWire reports that Lytics had only 26 employees at the time of acquisition.ย
mParticle has been more successful with fundraising; its latest raise was for $150M in late 2021, taking its total funds raised to $272M. mParticle hasnโt experienced the same level of employee shrinkage as Lytics, only decreasing its employee count by 9% over the last two years according to LinkedIn Insights. Roktโs $300M investment in mParticle as part of the merger will more than double the companyโs investment to date, which gives mParticle a real shot in the arm in trying conditions.
There are plenty of headwinds in the CDP category nowadays โ overcrowding and competition, product marketing challenges, falling budgets for marketers โ that can explain why CDPs are having such a tough time.
But maybe this was the predestined future for the CDP category ever since Dirk Hoerig โ the founder of Commerctools โ coined the term โcomposability,โ lighting a fire in the loins of marketers to start unbundling their Martech stacks. For CDP vendors, the old quip from Jim Barksdale โ the former president and CEO of Netscape โ comes to mindโฆ
โThere are only two ways I know how to make money in business: bundling and unbundling.โ
Are the Lytics, mParticle, and ActionIQ acquisitions a trio of canaries in the coalmine for The Great Unbundling that is about to wreak havoc in CDP land?
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Stay Curious,
Keanu Taylor
Make sense of marketing technology.
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