spate of consolidation in the social-analytics space, social media management firm Sprinklr has agreed to buy Dachis Group.
Per the deal -- expected to be announced Wednesday --
Dachis Group’s social analytics and optimization technology will be integrated into Sprinklr’s existing platform within the next three months. Dachis’s social consulting practice
will also be added to Sprinklr’s services enablement practice.
While declining to discuss financial terms of the acquisition, Ragy Thomas, CEO of Sprinklr, called it
“significant.” In linear terms, he estimated that it would have taken 12 to 15 months for Sprinklr to build comparable offerings -- which was too long for clients to wait.
“We’re finding growing frustration on the part of clients because they have to play the role of the [social marketing] systems integrator,” Thomas said. “This
deal integrates those systems for them.”
Industry competition also factored into the companies’ decision to join up, according to Brian Kotlyar, vice president of
marketing at Dachis. “Everyone involved in social can see it’s an active busy space with a lot of players,” Kotlyar said on Tuesday.
Analysts said such deals will become
commonplace over the next 24 months. Indeed, over that period, social-media management firms -- including technology vendors and agencies -- will shrink from roughly 200 to less than 24, according to
digital media industry analyst at Frost & Sullivan.
is definitely needed — and definitely happening,” Krishna said on Tuesday. “The market is extremely fragmented, and filled with vendors and agencies promising to manage
everything, which is B.S.”
The next logical question for Sprinklr is whether, with Dachis on tow, it can survive the next 24 months in one piece. Krishna thinks Sprinklr
and Dachis stand a chance, but it is too early to tell. “From what I have seen, [the combination of the two companies] does create a compelling social management suite,” Krishna said.
“If they have a deep partnership base, they will be competitive, but also become a prime target for acquisition."
Despite continued reservations from some brands, Forrester Research
has predicted that social media will have the highest cumulative aggregate growth rate across all channels through 2014.
Worldwide, Thomas recently said he expected to see businesses of
various sizes increase spending on social marketing by tenfold over the next three to five years.
Big brands have never been more in need of the sort of “social relationship
infrastructure” that Sprinklr offers, according to Thomas. Sprinklr clients include Hearst Digital, Microsoft, Cisco, Intel and Virgin America.
Last November, Sprinklr completed
a $17.5 million Series C funding round led by Battery Ventures and Intel Capital. With the raise, the company then set out to add another 100 employees by mid-to-late 2014, and continue its
By their own calculations, Sprinklr and Dachis have raised over $95 million in venture capital and acquired 11 companies, including three Facebook Preferred