Zeta Global Eyes an IPO, Yet Again

According to eMarketer, global marketing spend is expected to grow to $841 billion by 2024 from $647 billion in 2019 at a CAGR of 5%. Digital marketing spend accounted for $325 billion in 2019 and is expected to grow 10% annually to $526 billion by 2024. IDC estimates marketing software spend worldwide to grow 13% annually over the same forecast period to $35.5 billion by 2024. Zeta Global is a leading marketing analytics provider that focuses on AI and ML capabilities within the space.

Zeta Global’s Offerings

Zeta Global was founded in 2007 by David A. Steinberg, Bill Landman, and John Sculley. It was set up to provide marketing excellence to organizations by leveraging the growth of data, AI, and ML capabilities. I had met with co-founder David a few years ago when he had talked about Zeta’s early days.

The idea behind Zeta came to the founders from the realization that the marketing world was shifting from being focused on being creative and establishing relationships to one that was more focused on analytics and data understanding. They wanted to set up an organization that could provide services to meet this growing marketing ecosystem and help organizations run efficient customer acquisition and CRM programs by leveraging Big Data over the Internet. Initially set up as XL Marketing, the company renamed itself as Zeta Interactive, before being renamed as Zeta Global in 2016.

Today, Zeta has grown into a leading data-driven marketing technology company that provides its services to over 1,000 enterprise customers across multiple industries. Its enterprise software, the flagship Zeta Marketing Platform, is powered by its immense proprietary data set that includes a growing portfolio of over 220 million active, opted-in individuals. The access to this data set helps Zeta predict consumer intent at an individual level and translate that knowledge into better experiences across all marketing channels and devices for the organizations. Its technology helps organizations get a more predictable and profitable return on investment.

Zeta continues to expand its offerings through partnerships and acquisitions. Recently, it entered into a strategic tie-up with IgnitionOne that will allow IgnitionOne to adopt Zeta as an exclusive self-service programmatic platform. In return, IgnitionOne’s customers will gain access to Zeta’s proprietary data set with 750 million deterministic profiles and 500+ AI-derived intended audiences as well as AI applications, including intent scoring. As part of the partnership, Zeta will also acquire some of IgnitionOne’s programmatic business, including some sales and client management teams located within the United States and Brazil.

Zeta also announced its acquisition of San Jose-based Temnos for $21.6 million. Founded in 2013 by Tim Musgrove and Timothy Musgrove, Temnos works with publishers and advertisers to analyze, filter, and organize content, making it engaging to visitors, while also making it valuable to marketers. The acquisition adds customer intent capabilities to Zeta’s AI platform. Temnos gives a deep analysis of the web, by segmenting patterns that show vital purchase intent information from consumer life events, thus enhancing Zeta’s people-based audience capabilities. Prior to the acquisition, Temnos had raised $1.5 million.

Zeta Global’s Financials

Recently, Zeta filed its S1, where it revealed that it ended fiscal 2020 with revenues growing 20% to $368.1 million. Adjusted EBITDA for the year was at $39.6 million, up 63%. It reported a net loss of $53.2 million for the year.

Zeta has been privately held so far. It has raised $602.5 million in private equity and debt funding from investors including Morgan Stanley, BofA Securities, Barclays, Credit Suisse, GPI Capital, GSO Capital Partners, Franklin Square Capital Partners, Cerberus Capital Management, and FS Investments. Its most recent round was in March this year when it completed a $222.5 million debt funding round led by BofA Securities.

Zeta was looking to go public back in 2017, before deciding in favor of the relatively larger freedom that a private player enjoys. It now appears to be rethinking a listing and recently filed its registration statement for a proposed IPO.

Zeta is not the only player within the marketing analytics industry. A recent report by Mordor Intelligence estimates the global Marketing Analytics Market to grow at a CAGR of 14% from $2.13 billion in 2020 to reach $4.68 billion by 2026. Companies like Adobe, Google, and Salesforce have added analytical capabilities to their marketing offerings. However, Zeta believes that its end-to-end platform gives it an edge as it provides its customers with a holistic view of their consumer relationships and actionable insights. By including capabilities such as proprietary identity data, master data management, omnichannel engagement, native integration of marketing channels, and customer acquisition capabilities within its platform, it has been able to set itself apart from some of these competitors as none of them is able to provide a full suite of capabilities for acquisition, growth, and retention of customers.

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