Big Day in Local Search M&A: Vendasta Acquires Matchcraft

Today we learn that Canadian martech player Vendasta has acquired search, display, and social adtech platform Matchcraft from Advance Local for an undisclosed sum.

While the size of the transaction is not being disclosed, it’s a big deal in the local search space at any price. It represents the combination of two of the most recognized brands focused on delivering digital marketing tech for small businesses.

Cultural Fit

We had a brief chat yesterday with Matchcraft CEO Sandy Lohr. She told us the impetus for the sale came from Matchcraft’s parent company Advance Local, which felt it was the optimal time to shop the company around to strategic buyers.

Demand for adtech solutions combined with a lot of cash on potential buyers’ balance sheets apparently signaled that there was no better time to sell. And Vendasta, which raised $100 million in May 2021 was certainly in a position to buy.

Advance Local acquired the company in 2014. And it reportedly will remain a Matchcraft client.

Sandy told us Matchcraft and Advance met with a few different suitors. But she said the business and culture fit was strongest with Vendasta. She noted that both companies follow a channel partner model, rather than direct sales. And she said the companies are aligned culturally in their emphasis on developing and retaining talent, to give one example.

“During the process, we compared our vision statements,” Sandy told us. “And it was like we were completing each other’s sentences.”

A Strategic Priority

Vendasta CEO Brendan King told us that while acquiring an adtech platform has been on Vendasta’s priority list for some time, the urgency has recently grown. Why? As communities emerge from Covid and demand has increased. Brendan says Vendasta has been hearing this from its partner network. Therefore, Matchcraft fills a big gap in Vendasta’s capabilities. And it will help the company grow its addressable market, Brendan told us.

“MatchCraft provides best-in-class AdTech software, servicing a total addressable market of over $150 billion. The Vendasta platform services the MarTech, productivity, and eCommerce stacks that have over a $220 billion total addressable market,” Brendan said.

“Together, our platforms will give us the opportunity to provide all of our channel partners with the ability to service more of our SMB customers’ needs. And provide our combined entity with a $370 billion total addressable market.”

Buy Over Build

So this ultimately was ultimately a build vs buy decision. And Brendan said building its own platform wasn’t really a viable option.

“We have come to discover that marketing without advertising is really only half of the equation,” Brendan said. “We’ve been looking to get into advertising technology for a while, but building advertising technology is hard. It is a highly dynamic space that requires deep subject matter and technical knowledge. And something like this would have taken time. Bringing MatchCraft to our customer base accelerates this timeline by at least five years.” 

Brendan added the following. “MatchCraft had all of those key ingredients: a talented team of industry experts with enterprise sales and software knowledge, a fantastic AdTech platform, and a large set of loyal enterprise customers. The best part is that we’ve been friends for years.

We also wanted to know what Brandan thinks this deal signals about trends in local.

“Marketing and advertising are becoming increasingly intertwined in the customer journey,” Brendan said. “MarTech and AdTech are predicted to be among the fastest-growing segments in 2022, and are critical to the survival and growth of local businesses.”

So let’s see if any similar deals emerge in the coming months.

Long Term Vision

According to Vendasta, Matchcraft will continue to service its “current and future” clients as before. Initially, at least, the two companies will operate much as they have.

“MatchCraft will continue to operate as an autonomous company, and their customers and markets can expect ‘business as usual’ when it comes to the integrity of the products and services they provide,” Vendasta CEO Brendan King told us. “As the year evolves, we will pursue opportunities to connect our robust MarTech and AdTech platforms.”

We also asked about the long-term vision for the combined companies.

“Our vision is to take MatchCraft’s enterprise-level platform and bring it to thousands of mid-market agencies, ISVs, MSPs, and media companies,” Brendan told us.

“Similarly, MatchCraft’s enterprise customers will have access to an end-to-end platform to market, sell, bill, fulfill and deliver a complete stack of digital solutions–from advertising to marketing to eCommerce, productivity, and everything in between–at scale for the local businesses they serve.”

Ultimately, Brendan says the acquisition serves Vendasta’s long-term goal of building “an ecosystem around the supply, demand, and distribution of technology and services for SMBs.”

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