New IPO $ZETA Zeta Global, Ad Tech Saas, but growing slowly

$ZETA Zeta Global is a Software as a Service (Saas) company seeking to raise $250M on a $2.1B valuation, with $368M in 2020 rev,$53M net loss, growing at 25% YoY. 5.43X Price to Sales, but low EBITDA and growth are a concern.

Zeta Global Announces Successful Completion of Debt Refinancing | Zeta  Global

Founded in 2007 by David Steinberg (CEO) the company has raised over $600M in funding so far. It is seeking to sell 15.6M shares (+3.4M additional) at $10 – $12 / share.

Marketing tech company Zeta Global raises $140M at a $1.3B valuation |  TechCrunch
ZT

$ZETA has build a database marketing platform with 220M “opt-in” individuals in the US, which its 1000+ customers use to target offers, and engage for promotions and marketing.

The market $ZETA is going after is marketing automation software, which is $6.9B according to IDC, but $ZETA claims it can service a $36B market.

LOGO

One of the co founders of $ZETA is John Sculley, ex CEO of $AAPL, who is the Vice Chairman of ZETA.

$ZETA has over 1200 employees and has a direct sales force. It competes with Acxiom (went private for $2B in 2018).

$ZETA financials dont look too bad, but they are not compelling either, with 25% revenue growth net losses growing. Overall margins are in the 60% range and inconsistent.

While there are no direct comparable companies public, $ZETA is often mentioned in conjunction with marketing automation companies such as $HUBS Hubspot, Acoustic, $CRM Salesforce Pardot, $ADBE Marketo.

Analysis

$ZETA My only draw was that John Sculley was the vice chairman. This is a slow growth company, with a long history and inconsistent execution, so an easy pass for me.