A decade after its founding, the marketing tech startup Braze is beginning the process of becoming a publicly traded company.
Today, the New York-based company filed its Form S-1 with the U.S. 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 companies, a market sector that the research group IDC says 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 various channels. By using Braze’s platform, companies can use data from email, 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 reported large revenue growth in the past two years with $150.2 million in fiscal-year 2021 and $96.4 million in 2020. While the company has experienced momentum in 2020 and 2021, it’s still not profitable: Net losses totaled $31.43 million in 2021 and $31.36 million in 2020. Braze also reported annual recurring revenue passing $200 million in 2021, up from $100 million in 2019.
When Braze was cofounded in 2011 by CEO Bill Magnuson, Jon Hyman and Mark Ghermezian, it wanted to build a business that was mobile-first to help companies adapt to changing consumer behaviors. At the time of publication, the company was unavailable for comment about its IPO plans, but in a letter included in the S-1 Magnuson wrote that the “goal was to build a company that would capitalize on new technology to help the world’s best companies grow by trusting us with their most valuable asset: their customer relationships.”
“While technological change drove us forward, we knew that humanity should always guide us,” Magnuson wrote. “Great human relationships are built on mutual understanding, engaging communication and shared experience. It’s thus no surprise that the secret weapon of exceptional, enduring companies is the quality of their customer engagement.”
In the past two years, Braze has continued to grow its customer base from 728 in January 2020 to 890 January 2021 and 1,119 as of July 2021. The company has also continued to scale its cloud-based platform and now reaches 3.3 billion monthly active users through its customers’ applications, websites and other digital platforms—up from 2.3 billion in January 2020 and from 1.6 billion in January 2019.
Issues around privacy are also something Braze listed as a risk factor, citing international, federal and state regulations including newly passed legislation in California, Virginia and Colorado and existing laws such as the European Union’s General Data Protection Regulation. Several pages of the S-1 detail many of the laws and provide a glimpse into the various ways rules around data privacy could impact the company both legally and financially.“The laws are not consistent, and compliance in the event of a widespread data breach could be costly,” according to the SEC filing. “In addition, while we contractually limit the types of data our customers may process and store using our platform, we cannot fully control the actions of our customers. The failure of customers to comply with their contractual obligations may subject us to liability, and we may not have sufficient recourse to cover our related liabilities.”
Braze’s S-1 filing comes just a day after the advertising technology company Basis Globally Technologies—formerly known as Centro—confidentially filed its own S-1 with the SEC, further adding to the string of ad-tech and mar-tech IPOs that have taken place this year. Companies that have either gone public or begun the IPO process in 2021 include the content recommendation company Taboola, ad measurement firms DoubleVerify and Integral Ad Science and other marketing tech companies such as Zeta Global and Sprinklr.
Over the past decade, Braze has raised $175.1 million, according to Crunchbase. It 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 have included Battery Ventures, InterWest Partners, Rally Ventures and Blumberg Capital.
While Braze was growing quickly even before the Covid-19 crisis began, the company said the pandemic has accelerated the adoption of digital and mobile usage. Braze is also betting on the increased reliance on first-party data, especially as companies adapt to finding ways to reach people without as much third-party aggregated data.
“Modern brands know that when a customer is intermediated by a third-party aggregator, ad platform or distribution channel, it’s not really their customer relationship,” Magnuson wrote. “The highest value customer relationships are informed by first-party data and cemented through direct engagement.”
Follow me on Twitter
. Send me a secure tip
- “Revenue Streams”. Inc.com. Retrieved 27 March 2018.
- “Recurring Revenue Definition | Investopedia”. Investopedia. Retrieved 2015-11-05.
- “The 5 Best Kinds of Recurring Revenue”. Inc.com. 7 November 2014. Retrieved 2018-03-27.
- “Metric Analysis: Monthly & Annually Recurring Revenue – Hivemetric”. Hivemetric. 10 October 2016. Retrieved 27 March 2018.
- “Revenue models, product pricing & commercializing new technology”. MaRS. Retrieved 2015-11-05.
- “What is an Asset Sale? – Definition from Divestopedia”. Divestopedia.com. Retrieved 2015-11-05.
- “Revenue Streams in Business Model Canvas”. Cleverism. 24 March 2015. Retrieved 2015-12-27.
- “Revenue Streams in the Business Model”. http://www.ecommerce-digest.com. Retrieved 2015-11-05.
- “11 Revenue Streams For SaaS Business”. Forbes. Retrieved 2015-11-05.
- “Revenue Streams – Industry examples of revenue streams”. http://www.referenceforbusiness.com. Retrieved 2015-11-05.Lavecchia, Gina (2000). Profits on a silver platter: Restaurant Hospitalit
- Bodie, Zvi; Kane, Alex; Marcus, Alan (2004). Essentials of Investments. McGraw Hill. p. 452. ISBN 9780072510775.
- “Earnings before interest and, taxes (EBIT)”. NASDAQ.
- Murphy, Chris B. (2019-07-11). “How are EBIT and operating income different?”. Investopedia.
- “What is EBIT? definition and meaning”. investorwords.com. Retrieved 2019-10-03.
- Retrieved 12 July 2012.
- Jessica, Matthews (8 July 2021). “How regular investors can access IPOs”. Forbes. Retrieved 30 July 2021.
- Rose Selden, Shannon; Goodman, Mark. “The Shift in Litigation Risks When U.S. Companies Go Public”. Transaction Advisors. ISSN 2329-9134.
- “The Laws That Govern the Securities Industry”. Securities and Exchange Commission. Retrieved 12 December 2014.
- “UK Listing Authority”. Retrieved 12 December 2014.
- Lipman, International and U.S. IPO Planning, ISBN 978-0-470-39087-0
- Series 79 Investment Banking Representative Qualification Examination, Study Manual, 41st Edition. Securities Trading Corporation. 2010.
- Robert E. Wright, “Reforming the U.S. IPO Market: Lessons from History and Theory”, Accounting, Business, and Financial History (November 2002), 419–437.
- Robert E. Wright and Richard Sylla, “Corporate Governance and Stockholder/Stakeholder Activism in the United States, 1790–1860: New Data and Perspectives”. In Jonathan Koppell (ed.), Origins of Shareholder Advocacy (New York: Palgrave Macmillan, 2011), 231–51.
- “Registration Statement on Form S-1”. http://www.sec.gov. Retrieved 10 December 2017.
- “The Main Players In An Initial Public Offering”. 26 February 2012. Retrieved 22 July 2014.
- “Ten of Nation’s Top Investment Firms Settle Enforcement Actions Involving Conflict of Interest”. 28 April 2003. Retrieved 23 July 2014.
- Gould, Michael. “How Non-GAAP Measures Can Impact Your IPO”. Transaction Advisors. ISSN 2329-9134.
- Demos, Telis (21 June 2012). “What Is a Dutch Auction?”. The Wall Street Journal. Retrieved 16 October 2012.
- “What Is a Dutch Auction IPO?”. Slate Magazine. 6 May 1999. Retrieved 16 October 2012.
- Sommer, Jeff (18 February 2012). “No Bitter Aftertaste From This Stock Offering”. The New York Times.
- “Journal of Business & Technology Law – Academic Journals – University of Maryland Francis King Carey School of Law” (PDF). Retrieved 27 November 2016.
- Hensel, Nayantara (4 November 2005). “Are Dutch Auctions Right for Your IPO?”. Working Knowledge. Harvard Business School. Retrieved 16 October 2012.
- Anand, Anita Indira. “Is The Dutch Auction IPO A Good Idea?”. Queen’s University Law and Economics Workshop. Queen’s University. Retrieved 21 July 2021.
- “WhiteGlove seeks to raise $32.5 million in ‘Dutch auction’ IPO”. Statesman. Retrieved 16 October 2012.
- Cowan, Lynn (21 September 2011). “WhiteGlove Health Shelves IPO Indefinitely”. The Wall Street Journal. Retrieved 16 October 2012.
- “Regulatory Notice 15-30: Equity Research” (PDF). FINRA. Retrieved 21 July 2021.
- “Aramco’s ‘greenshoe option’ pushes IPO to $29.4 billion”. Arab News. 12 January 2020. Retrieved 15 January 2020.
- “Alibaba IPO Biggest in History as Bankers Exercise ‘Green Shoe’ Option”. The New York Times. 18 September 2013.
- “Softbank Corp IPO Second Biggest in History”. Fortune.com. 11 December 2018.
- “Agricultural Bank of China Sets IPO Record as Size Raised to $22.1 Billion”. Bloomberg. 15 August 2010.
- “ICBC completed its record $21.9 billion IPO in October 2006”. Bloomberg. 28 July 2010.
- “AIA’s IPO Boosted to $20.5 Billion With Overallotment”. Bloomberg. 29 October 2010.
- Grocer, Stephen (17 November 2010). “How GM’s IPO Stacks Up Against the Biggest IPOs on Record”. Wall Street Journal.
- “GM Says Total Offering Size $23.1 Billion Including Overallotment Options”, Bloomberg, 26 November 2010
- Rusli, Evelyn M.; Eavis, Peter (17 May 2012), “Facebook Raises $16 Billion in I.P.O.”, The New York Times
- “China eclipses US as top IPO venue”. 28 December 2011.
- “Deloitte releases statistics on Hong Kong and Mainland IPOs in 2012 | Deloitte China | Press Release”.
- “Global IPO market booms 50% in 2014”. 18 December 2014.
- “Global number of IPOs highest since financial crisis”. 27 December 2017.
- “Hong Kong regains global IPO crown from New York in 2018 thanks to its listing reforms”. 24 December 2018.
- “Hong Kong exchange to remain world’s largest IPO market in 2019: KPMG report”. 12 December 2019.
- “Hong Kong ranks as 2nd largest IPO market in 2020”. 13 January 2021.
- “Mainland China and Hong Kong IPO markets – 2021 mid-year review” (PDF). Retrieved 8 July 2021.