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M&A exercise will increase within the martech sector, whereas investments and new merchandise gradual

The number of new products launched in the martech sector slowed in the third quarter of 2024, while investments declined and M&A activity increased.

This is according to CabinetM’ MarTech Innovation Report Q3 2024.

New product announcements decline in third quarter 2024

CabinetM saw a slight decline in new product announcements since last quarter, with the number falling to 72 in Q3 2024. This still represents more product announcements than the report found this time in 2023 (65 in Q3 2023, an increase of 11% for 2024).

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Investing in martech providers is evolving

Investments in martech companies were spread across 25 categories and declined significantly in Q3 2024, from $10.8 billion in Q2 2024 to $1.5 billion in Q3 2024.

The second quarter figure, however, was distorted by two large AI-based investments of $6 billion in xAI and $1 billion in Scale AI. Investment in the third quarter of 2024 was comparable to the average quarterly investment generally observed.

Email security and deliverability companies received the most investment this quarter: $270 million (18% of total funding).

Martech investment year after year.Martech investment year after year.

Dig Deeper: Where do martech providers find their revenue? Let’s take a look

Keeping an eye on AI

For almost two years now, CabinetM has been tracking and cataloging generative AI products and other categories and products that leverage AI. In Q3 2024, six new AI tools were announced and $60 million in funding was announced (the lowest level of AI we’ve seen to date).

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M&A activity increased in third quarter

In the third quarter of 2024, CabinetM saw a 38% increase in M&A activity, with 33 acquisitions, compared to 24 in the second quarter of 2024. M&A activity over the past year has been cyclical by quarter and is regularly between 24 and 33 each quarter.

T3 23T4 23T1-24T2 24T3 243124332433M&A activity in the martech sector, by quarter. Source: Cabinet M.

Quarterly comparison of the martech sector. Quarterly comparison of the martech sector.

CabinetM’ MarTech Innovation Report Q3 2024 is available without registration. Downloading it won’t result in an avalanche of emails and phone calls.

All CabinetM MarTech innovation reports are accessible without a portal on LibraryM.

Dig Deeper: 14,106 martech tools reveal 3 trends you need to master

Contributing authors are invited to create content for MarTech and are chosen for their expertise and contribution to the MarTech community. Our contributors work under the supervision of the writing and contributions are checked for quality and relevance to our readers. The opinions they express are their own.

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