Zeta Global, the marketing tech company that has recently acquired the likes of eBay’s enterprise arm and Acxiom Impact, is preparing for another round of acquisitions and investments in its technology. To do so, the company today announced that it has raised a $140 million Series F round. The round is a bit unusual in that it consists of $115 million in equity capital and $25 million in debt financing. It includes equity from GPI Capital (Global Partnership Investing), as well as funds sponsored by Franklin Square Capital Partners and sub-advised by GSO Capital Partners LP (GSO), the credit division of private equity firm Blackstone.
The company’s focus is squarely on big enterprise customers in the Fortune 1000 league. Its customers include the likes of Sprint, UPS, IKEA, American Airlines, British Airways, PayPal and the NFL, and its product portfolio spans the gamut from CMR services to multi-channel marketing solutions that focus on both in-store interactions with customers as well as e-commerce. While it started before “big data” was a buzzword, bringing data analysis to marketing is essentially its expertise.
As Zeta CEO David Steinberg told me, the reason for the mix between equity and debt is due to the fact that, as a profitable company, Zeta has long been able to tap the debt market (and has done so in the past). Surprisingly, though, he also noted that it would be an overstatement to say that this had been an easy round to raise. Zeta actually went out looking for $50 million to $75 million, but many of the investors the company talked to weren’t interested in doing rounds under $100 million. I guess that is indeed an interesting problem to have.
Steinberg also noted that Zeta has typically used its debt to acquire other companies. Chances are, it will do that same thing this time around, though the company doesn’t currently have any deals in the works. It has typically made an acquisition once per year, though, and none so far this year, so it’s only a matter of time. Steinberg argued that we’ve seen a lot of companies in the CRM, big data and analytics space raise a lot of money in the last two or three years, and, while many of them developed interesting technology, few managed to gain traction. Those would be obvious candidates for an acquisition for Zeta, though Steinberg didn’t rule out an acqui-hire if the right company came around.
When I talked to him a few weeks ago, Steinberg noted that he was studying the IPO market to see how it would play out before deciding whether to take the company public or not. “The IPO markets are good, not great,” he noted when I talked to him this week. “We are still in a position to go if they get great — or what if they don’t.” In his view, if the market is great, Zeta could always opt to IPO, but if the market turns down, it can use the cash it has at hand to buy undervalued companies.