So this series has all been about public B2B and Cloud leaders. Some are still in hypergrowth mode, like Toast and Shopify and Snowflake and Samsara. Others are at a more mature phase for now, like Dropbox and Salesforce and PagerDuty.
But they all keep going, don’t they? Mostly, yes, at scale. And if growth stalls, doesn’t someone step up and buy them, cheap? Sometimes, for sure.
But it was tough going forMarin Software. Now Marin has been struggling for many years. It was founded way back in 2006, and did a small IPO in 2013. They were an early leader in digital advertising and marketing software, but couldn’t keep their early lead. But I didn’t realize it had gotten this bad. After a brief revival in the Boom of 2021, revenue just kept falling … and it had to go through reorg out of bankruptcy at $16m ARR or so.
At just shy of Year 20.
5 Tough Learnings:
#1. Just Adding “AI” to Your Product Doesn’t Magically Add Growth
Marin worked in 2024 to add AI to its offering, powered by OpenAI. But simply adding AI isn’t enough.
#2. Launched a Free Media Audit Service. But It Wasn’t Enough
Many from HubSpot on have accelerated top of funnel with free audits and similar services. It works, done right. But it was too little, too late for Marin.
#3. The Last $16m of ARR or so Remained Sticky — But Couldn’t Cover Their Losses
Yes, the final Marin customers still in many cases stayed after many years, at least to some extent. Much of its revenue came from revenue sharing from Google. Even prior to the reorganization, revenue was only declining -4% a year. SaaS is sticky. But they just ran out of cash, finally, in the end. They were down to their last $5.6 million a year ago, and couldn’t get profitable on that last revenue. Even after shrinking to 100, and then 75, and then finally 40 employees and a handful of contractors.
#4. Google Revenue Sharing Was 40%+ of Their Revenue
Even at the end, Marin was still helping its customers buy media on Google, and getting paid by Google pretty well for it — $6m+ a year — although the decline in that revenue also reflects the decline in Marin.
#5. Doing Reorg Under Bankruptcy
It took a while, but Marin is executing a sale of its assets via a tax-free reorganization under the bankruptcy code of the United States. All creditors will be paid in full, and the remaining funds will be distributed to common shareholders. Marin is being acquired by Kaxxa Holdings, Inc., which is part of the broader ESW Capital group, an Austin-based organization controlled by technology entrepreneur Joe Liemandt that specializes in acquiring, transforming, and operating mature business software companies.
Ok sorry for a bit of a Debbie Downer of this series ;). But a cautionary tale once in a while is worth hearing.
Next week, back to the success stories!
