It’s not infrequent that a merger or acquisition takes place in a particular coverage area and, as an analyst, I’d typically expect to be ready to discuss the event at a moment’s notice.
Not so when it came to last Monday’s news about eBay acquiring predictive analytics startup SalesPredict.
There are a little over 20 vendors vying to provide predictive modeling solutions to B2B marketers and sales professionals. It’s a “new-ish” technology, and one might reasonably expect consolidation or merger activity. But for most folks, this particular collaboration was an eyebrow raiser and I needed to talk to some people first.
Founded in 2012, SalesPredict builds predictive algorithms that help B2B firms identify correlative relationships between the presence of various attributes and/or buyer behaviors to positive or negative outcomes. I had met with Yaron Zakai-Or, CEO and co-founder, and Sahil Mansuri, VP of Marketing, several times in my role as analyst. I imagine Sahil’s background in marketing helped them to grow their base within 6 months to 60 customers. But it didn't hurt that at SalesPredict, it was always about powerful technology without bounds. Co-founder Kira Radinsky, a self-proclaimed “data scientist at heart,” says that that founding SalesPredict was part of her vision “to bring about a major change in how business is conducted by unifying micro- and macro-economic predictions.”
This didn’t go unnoticed by eBay, with its own goal of increased sophistication in artificial intelligence, machine learning, and data science to support its structured data plan. In fact, that is exactly how eBay described the acquisition – frankly reminding me of how broad the use cases of predictive technology really are.
In a conversation with Yaron specifically to discuss the acquisition, he indicated, “It became clear that the technology we were building for B2B firms had potential in B2C – and the opportunities for scale and the applications of the models are exciting.” Indeed, since predicting propensity to buy requires building algorithms per product category, the (more than) 900 million individual listings on eBay translates to an enormous opportunity to extend SalesPredict’s machine learning and predictive analytics. This extension, described simply, would likely increase customer sales conversions and customer experience by offering the right items to the right individuals at the right price – brought to the attention of eBay shoppers by predictive-enabled, contextual and customized recommendations. Yaron’s comment about the opportunity for scale is an understatement – improving a single process in the eBay ecosystem can be expected to have a positive impact on countless product categories, buyers, and sellers.
The question is – since this story makes so much sense, how likely is it that we’ll see additional vendors in this space be acquired by B2C firm for their technology? All I can say for certain is that this acquisition proves that predictive technology is attractive to large B2C enterprises. It’s easy to see how predictive marketing technology is essential to online retailers as they look for ways to boost and optimize sales and some of them may buy as well as build, just as eBay has done.
Note: SalesPredict will not be taking on any new customers. All arrangements with SalesPredict’s existing customers are expected to continue as indicated in their contracts; and eBay will work with SalesPredict to develop a plan for those existing customers.