First Data Customer Engagement Platform Braze Goes Public, From AppBoy To BRZE

Customer engagement Braze Inc $BRZE targeted a $55 to $60 per-share IPO price range and priced at the high end of $65 per share. The stock opened 34% over the deal cost in their market debut on Wednesday, getting a valuation of almost $8 billion. The stock closed at $93.39 on day one.


Customer engagement platform Braze (BRZE)

Founder-led Braze provides a customer engagement platform used by businesses to improve their marketing. Braze says its foundation permits its customers to improve comprehension of shopper practices and plan their advertising systems in like manner.

The company is unprofitable with strong growth, Braze serves over 1,100 clients with net revenue retention of 120%+ as of 7/31/21. It’s rivals include programming monsters like Adobe Inc (ADBE) and Inc (CRM) and more niche firms like Airship, Iterable, Leanplum, MailChimp, and MoEngage.

Braze targeted a $55 to $60 per-share IPO price range and priced at a solid $65 per share. In valuation terms,  that gives the company an estimated valuation at $65 per share of $6.7 billion for fully diluted shares. Goldman Sachs and Co, J.P. Morgan, and Barclays were the lead guarantors for the IPO.

The solid premium paid is from speculators expecting benefits from the sped upshift in buyer conduct toward computerized and versatile exchanges because of the COVID-19 pandemic. Prior to the IPO, Braze’s last private gathering pledges occurred more than three years prior, when it raised $80 million at a valuation of $850 million.

“We will keep on growing the organization to exploit the gigantic addressable market, and the investigation of the public market is something that has been a sort of centering point for the organization for a really long time,” Chief Executive Officer Bill Magnuson said.

Clients include Germany’s internet-based Delivery Hero (DHER.DE), buyer finance firm Credit Sesame and PayPal Holdings Inc’s (PYPL) distributed installment administration Venmo, Burger King, Etsy, HBO Max and Pizza Hut to determine how and when it is best to contact consumers. One of it’s competitors is email marketing service Mailchimp, which Intuit Inc. in September agreed to buy for about $12 billion.

The Braze Story

Braze was formed in March 2011 by CEO, co-founder, and Minnesota native Bill Magnuson. The company was initially named “AppBoy,” and its sole mission was to help companies make their mobile apps more engaging. By 2021 Braze has broadened its mission to driving customer loyalty across multiple channels. That involves pushing marketing messages out via text, email, social media, and wherever else customers happen to be.

“Is [this] someone that loves brand new things? Are they a seasonal purchaser or a utility purchaser? Do they respond to discounting?” said Braze Chief Executive Bill Magnuson.

Braze helps brands use their first-party data, which includes information that companies have gathered about their own customers through apps or loyalty card programs, to try to understand consumers and then communicate with them.

Third-party data for marketing purposes is under pressure since Apple introduced changes to give consumers more control over the use of their data on apps. Google also plans to stop supporting third-party tracking cookies in its Chrome browser by late 2023.

This is one of the reasons investors were excited by Braze, “Platforms like Braze…need to help customers curb a reliance on third-party data and help identify other ways to engage individuals,” Mike McGuire, a vice president analyst at research firm Gartner said.

IPO Week Ahead

 Source: Renaissance Capital

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