Marketing analytics startup Zeta Interactive’s latest financing round disclosed Wednesday isn’t notable just for its size—a substantial $125 million from the GSO Capital Partners and Franklin Square subsidiaries of Blackstone Group. It’s how quickly it happened.
The deal, a combination of debt refinancing and cash, was negotiated and signed in a speedy three weeks. That was after Zeta considered an impressive 26 term sheets as part of a fundraising process managed by investment banker William Blair, according to the company’s co-founder and top executive.
“We didn’t expect to close this deal as quickly as we did,” admitted Zeta Chairman and CEO David Steinberg, who spoke to Coins2Day from his vacation in Greece.
Actually, it’s easy to see why Zeta is generating so much interest. Founded in 2007 by Steinberg along with ex-Apple and Pepsi-Cola CEO John Sculley, the New York-based company’s technology helps businesses identify which advertising and marketing touchpoints are actually influencing sales. In short, it’s really good at determining attribution. Then, it helps businesses use that knowledge to approach other prospects.
“Google is a great engine, it has such good attribution … We bring attribution everywhere else. We know where someone clicks and then buys,” Steinberg said. “For example, say a wireless customer pauses on a Facebook ad. Later, they buy the product from Walmart. We can match that up, and know right away.”
Last year, Zeta topped $168 million in revenue from approximately 720 customers, including accounts like Coldwell Banker, Quaker Oats, T-Mobile, Travelers, and US Airways. For 2015, it’s forecasting $200 million, Steinberg said. The company has been profitable for the past three years, he added.
Competition is pretty stiff. Zeta offers prospects a $50,000 test run accompanied by a money-back guarantee if its platform can’t reduce customer acquisition costs by 25%. “We’ve never had to pay it back,” Steinberg said, although he notes that one drawback is some organizations don’t have a good enough grasp of those expenses to take his team up on the offer.
“Zeta is one of the most successful and fastest-growing companies focused on the big data and analytics space,” said Brad Colman, principal with GSO Capital Partners. “This is a sector that we’ve watched closely and we are very excited about. We are committed to helping Zeta grow their business organically and through acquisition.”
In the past two years alone, Zeta bought marketing automation company ClickSquared and the machine-learning division of Adchemy. It’s seeking other deals that can expand its analytics capabilities and email capacity, Steinberg said. Another priority is international expansion. A portion of the new round, $50 million to be exact, will go toward paying down debt.
Zeta isn’t commenting on the valuation used for the round. Sources familiar with the terms, however, said the deal elevates the company into the unicorn club of private companies valued at more than $1 billion. Zeta previously raised about $28 million.
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