A decade after its founding, marketing tech startup Braze begins the process of becoming a publicly traded company.
Today, the New York-based company filed its Form S-1 with the United States Securities and Exchange Commission to go public on the Nasdaq Stock Exchange under the ticker symbol “BRZE”. Braze is part of the growing industry of marketing campaign management software vendors, a market segment that IDC research group estimates could reach $ 15 billion in 2021 and $ 19.4 billion in 2024. .
The Customer Engagement Company provides technology for brands to interact directly with consumers through a variety of channels. Using Braze’s platform, businesses can use data from emails, apps, and other digital platforms to better understand their customers before targeting them with personalized messages. Well-known brands that use Braze for their marketing include Burger King, Anthropologie, Birchbox, Grubhub, IBM, Hinge, Nascar, PayPal, HBO, iHeartRadio, Sephora, and Rosetta Stone.
According to its SEC filing, Braze has reported strong revenue growth over the past two years with $ 150.2 million in fiscal 2021 and $ 96.4 million in 2020. Although the company saw momentum in 2020 and 2021, it is still not profitable: net losses totaled $ 31.43. million in 2021 and $ 31.36 million in 2020. Braze also reported annual recurring revenue exceeding $ 200 million in 2021, up from $ 100 million in 2019.
When Braze was co-founded in 2011 by CEO Bill Magnuson, Jon Hyman, and Mark Ghermezian, the company wanted to build a mobile-first business to help businesses adapt to changes in consumer behavior. At the time of publication, the company was not available to comment on its IPO plans, but in a letter included in S-1, Magnuson wrote that “the goal was to build a business that would capitalize on new technologies to help the best companies in the world grow by entrusting us with their most valuable asset: their customer relationships.
“While technological change has moved us forward, we knew that humanity should always guide us,” Magnuson wrote. “Good human relations are built on mutual understanding, engaging communication and shared experience. It is therefore not surprising that the secret weapon of exceptional and sustainable companies is the quality of their customer engagement.
Over the past two years, Braze has continued to grow its customer base from 728 in January 2020 to 890 in January 2021 and 1,119 in July 2021. The company has also continued to evolve its cloud-based platform and now reaches 3.3 billion monthly active users. via its customers’ applications, websites and other digital platforms, up from 2.3 billion in January 2020 and 1.6 billion in January 2019.
Privacy concerns are also something Braze listed as a risk factor, citing international, federal, and state regulations, including recently passed laws in California, Virginia, and Colorado and existing laws such as the General Regulation. on European Union data protection. Several pages of S-1 detail many laws and provide insight into the different ways data privacy rules could impact the business, both legally and financially.
“The laws are inconsistent and compliance for widespread data breaches could be costly,” according to the SEC filing. “In addition, although we contractually limit the types of data that our customers can process and store using our platform, we cannot fully control the actions of our customers. Failure by customers to meet their contractual obligations may expose us to liability and we may not have sufficient remedies to cover our related liabilities. “
Braze’s S-1 filing comes just a day after ad technology company Basis Globally Technologies, formerly known as Centro, confidentially filed its own S-1 with the SEC, joining the series advertising technology and mar-tech IPOs that took place this year. Companies that went public or started the IPO process in 2021 include content recommendation company Taboola, ad measurement companies DoubleVerify and Integral Ad Science, and other marketing technology companies such as Zeta. Global and Sprinklr.
Over the past decade, Braze has raised $ 175.1 million, according to Crunchbase. He raised an $ 80 million Series E round led by Meritech Capital Partners in 2018, just a year after raising a $ 50 million Series D round led by ICONIQ Capital. Other investors include Battery Ventures, InterWest Partners, Rally Ventures and Blumberg Capital.
As Braze grew rapidly even before the onset of the Covid-19 crisis, the company said the pandemic had accelerated the adoption of digital and mobile use. Braze is also betting on increased reliance on first-party data, especially as businesses scale to find ways to reach people without so much aggregated third-party data.
“Modern brands know that when a customer is interposed by a third-party aggregator, ad platform, or distribution channel, it’s not really their customer relationship,” Magnuson wrote. “The most profitable customer relationships are informed by first-party data and cemented by direct engagement. “