PartnerStack makes aggressive move where others have only gestured.


Summary:

  • B2B affiliate network PartnerStack received $29M in a series B funding round led by 3L Capital and supported by Harbourvest and Whitecap Ventures

  • PartnerStack addressed a need in a growth market that was not being met by competitors

  • Emerging affiliate markets often have differentiated needs that can be met by industry disruptors and PartnerStack provides a roadmap


There have been a lot of recent investments in the affiliate space.


Last week 3L Capital led a $29M investment in PartnerStack, a B2B affiliate marketplace, indicating value can be created by building a product for a specific audience.


The affiliate marketing industry often speaks about B2B or “strategic partnerships,” advocating that business development teams should adopt the affiliate model to scale channel partnerships. But major platforms have not built product features, distribution agreements or pricing models to reach this audience and service providers have struggled to provide adequate offerings.


Meanwhile, PartnerStack quietly built up a network of B2B partners, a positioning statement that resonated with business development teams and a pricing model that makes sense for the market. Is that enough to fend off networks/platforms who have bigger centers of gravity? Acquiring partners on a network is not a defensible position long term, so they’ll have to continue to build value on top of the network.


But, now they have money to do so.


This is not a new strategy. New markets have adopted the affiliate model and new entrants emerged to meet that need. Partnerize meeting the growing needs of travel companies is a recent example. Affiliate marketing is challenging because different markets often have fundamentally different needs, inhibiting scale. In travel, payment terms and timing are far more complex than retail - necessitating more customizable tech. In B2B, sales cycles are longer with more touch points. And as service industries and new partner types start to adopt the affiliate model, new features will be required.


PartnerStack is a roadmap for competitors or new entrants looking for space in the market: pick an emerging growth category, aggregate partners and build features and a pricing model that meet the target audience need . We are in the first inning of growth, so there is plenty of room to innovate.


Considering the recent wave of acquisition, PartnerStack, and other vertical players could be good acquisition targets in the medium term as larger players consider their build, buy, partner strategy.


Up next from Martech Record:

On the Record

Be Informed on the Regular.

Receive news, premium content, and event alerts right in your inbox.