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Braze Begins The IPO Process Amid Pandemic-Era Growth In Digital Marketing

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.”

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Marty Swant

Marty Swant

I’m a Forbes staff writer and editor of the Forbes CMO Network, leading coverage of marketing and advertising especially related to the ever-evolving role of chief

Source: Braze Begins The IPO Process Amid Pandemic-Era Growth In Digital Marketing

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France’s Burger ‘King’ Asks For Help To Avoid Ecosystem Collapse

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Olivier Bertrand, one of France’s biggest restaurant owners has asked the government for assistance to ensure the sector doesn’t collapse. Bertrand owns over 850 eateries across France, ranging from Burger King to high-class brasseries such as Bofinger and Lipp in Paris.

In an interview with BFM TV, Bertrand said that if French restaurants had to reopen tomorrow it would lead to the collapse of the sector and the entire food ecosystem that supports it. He added that customers aren’t looking for a culinary experience which has a waitress in a safety visor and plexiglass between each table.

Bertrand has called on the government to introduce a package to help the industry, similar to the recent €18 package introduced to help the tourist sector. He has asked for four things:

Brasserie Lipp in Saint-Germain-des-Pres Square, Paris.

  1. That restaurants shouldn’t have to pay rent and property charges while they are closed.
  2. That as restaurants open, they should begin paying rent and charges on an incremental basis until they are operating at full capacity.
  3. That the government should keep its system of chomage partiel in place until the end of 2020 (where the government supplements up to 84% of normal incomes for people who have lost their jobs during the pandemic).
  4. That VAT should be reduced from 10% to 5.5%.

Bloomberg reported that the French restaurant industry currently counts more than 1 million people unemployed with the shutdown causing a loss of 13 billion euros ($14 billion) in sales. Bertrand said that the impact is being felt by big and small players and across the agriculture, animal raising and fishing sectors.

While France has emerged from lockdown, citizens cannot travel further than 100 km (62 miles) except for specific exceptions and restaurants, cafés and bars remain closed (although many are operating take away and delivery services). The government will take a decision on May 25 to see if they can reopen on 2 June.

Alex Ledsom

Alex Ledsom

I have lived in Provence ever since I exchanged my London city life for the charms of the south of France. I have a background in research, business and finance.

Source: https://www.forbes.com

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