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Martech-Report-22-23

The Martech Report 22/23

Martech is more important than ever, and despite a more challenging economic situation in 2022, martech budgets are continuing to grow. The global market for Martech and Salestech is estimated to be worth $508.9bn.

As our latest State of Martech report finds organisations face a number of challenges around marketing technology. The biggest one is finding the skills and talent needed to drive martech initiatives.

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Martech: Beat the Gold Rush in South Africa and Australia

 

Two glinting gold fields of martech fortunes lie in South Africa and Australia. Rich pickings lie ahead for those with far-sighted vision.

Investors hunting for future glittering spoils, take heed. Currently, the biggest challenge for martech in South Africa and Australia is the resistance. Martech needs cash to give it life but then it will mushroom; but only if matched by expertise.

The pandemic has forced the world to meet virtually, perform remotely, celebrate by video and order by app. Such reliance on digital assets brings both opportunity and challenge for investors, as well as brands, agencies and tech vendors.

Trendsetting

Emerging from the pandemic, Moore Global is rapidly grasping the power of martech as a $344.8 billion marketplace worldwide. The Martech Report 2021/22 highlights the fast-growth trends in the US and UK, who are spearheading the phenomenon.

Martech is still in its infancy but will inevitably reach South Africa and Australia. Knowing that it is coming will accelerate its arrival. While The Martech Report looks at strategy, South Africa and Australia are viewing martech from a start-up and investment perspective.

Long before gold fever hits, those in the know will stake their claim. They will start establishing their competitive edge and building investment portfolios, whether financing indigenous start-ups or acquiring companies just converting to digital.

Window on South Africa

The Western Cape has become a huge incubator for tech entrepreneurs in South Africa. Young tech businesses flock to Stellenbosch and Cape Town, aiming to get their inventions airborne. Several big international names have been spawned in South Africa, most notably Naspers – the global internet group and one of the largest technology investors in the world – which owns 46% of Chinese tech conglomerate Tencent.

However, the capital market for aspiring tech start-ups is under-developed. Budding Elon Musks have to venture to the USA, UK, Europe or offshore for their investment structures. “Live in the sun but invest in the rain,” so the South African saying goes. Advantageously, South Africa is in a European timezone, making business with the UK and Europe relatively straightforward.

Raising funds abroad often means re-establishing South African IP in another jurisdiction. This is an unintended consequence of exchange control, introduced in the 1940s to retain IP in South Africa. However, due to policy uncertainty and politics, the opposite appears to be happening.

With everything being data-driven, companies are seeking help with their brand analysis. What they want is a tidy perfect solution; however, what they need is a realistic flexible solution. This requires martech expertise to understand the marketplace and the specific application possibilities.

Early adopters of tech in the SA market usually opt for best-of-breed solutions, regardless of their origins. Start-ups looking to join the martech pilgrimage in South Africa will need to differentiate themselves starkly if they want to catch an investor’s eye.

Moore Johannesburg has recently helped PayPrint (a biometric payment and data authentication start-up) partner with Adoozy Power in rolling out their combined solution into several retail shopping centres and fast-food outlets. Together, these businesses combine the biometric payments and access to power to develop a compelling martech offering.

Window on Australia

Many start-ups in Australia have stunning tech ideas and brilliant expertise in their niche but no clue how to take it to market. Admittedly, some unicorn tech companies have stayed in Australia, along with their software IP.

The sector needs to go through the incubation phase to create appetite. This will lead to consolidation which, in turn, will ignite investment confidence in these start-ups.

While it is easier for start-ups in Australia to raise cash than in South Africa, the competition is fiercer. There has been exponential growth in the last decade but the concept of martech is still embryonic. Buzzwords bandied about in the report are still alien and yet to steal into everyday language here, like stack, MOP, integration, DXP, JOE…

The low interest rates of the last few years have made it easier to raise funds. People have been sitting on cash – for example, in superannuation (pension) funds – and bank rates are low. They are chasing better returns, taking risks and diversifying across several start-ups.

However, how does a start-up value itself? How does it predict its future worth? How does it demonstrate its longevity of returns? There are many South African start-ups in Australia bringing great ideas and innovations. Naspers is also big in Australia but invests principally in non-South African ventures. Why?

Ultimately, the ability to read the marketplace is key. Findings need to be analysed, interpreted, implemented, monitored and exploited. This is where specialist martech knowledge, understanding and implementation come in.

Moore Australia is currently helping a client develop a data collection system that analyses brand gravity from multiple sources on one platform. Assistance includes raising funds via seed, direct equity and unsecured convertible notes. This has significantly increased the company’s valuation.

Help from the experts

Moore Global has experience in each stage of the martech evolution across the world. Contact us to discuss your particular situation and how we can help.

Moore Global has expertise in:

  • Corporate finance
  • Private equity
  • Digital transformation
  • HR
  • Global mobility
  • Media and marketing services

Contact details

  • Olivier Barbeau, Managing Partner, Moore Johannesburg, South Africa
  • David Tomasi, Managing Partner, Moore Australia
  • Damian Ryan, Corporate Finance Partner, Moore Kingston Smith, UK
  • Jeff Blackbeard, Global Director of Sectors and Markets, Moore Global