You’re looking to go out and have some drinks and dinner at a new restaurant that you’ve never been to before.
And like any normal person, you reach for your phone in your pocket and begin searching for nearby restaurants.
Not only do nearby restaurants pop up, but all the information you were looking for (plus more) pops up, too, information like the restaurant’s business hours, location, and even its menu — everything you could need to know about a particular place.
I do admit that sometimes I take advantage of how easy, quick, and accessible this information is.
Can you imagine doing a search for a place and then having to hope it has a website, and then going to the website to maybe see its hours, menu, or location? I can’t imagine it, either. Especially because we now have that level of convenience and we also expect it.
But it’s a lot of work for businesses to manage and make sure their information is accurate and up to date. And that’s where Yext steps in…
Yext’s IPO
IPO Details:
- Proposed Symbol: YEXT
- Exchange: NYSE
- Expected IPO Date: 4/13/17
- Industry: Technology / Computer Processing & Data Preparation
- Underwriters: Morgan Stanley / J.P. Morgan / RBC Capital Markets
- Market Cap: $764.4 million
- Net Income: $-43.2 million (past 12 months)
- Revenues: $124.3 million (past 12 months)
- Shares Being Offered: 10.5 million
- Price Low: $8
- Price High: $10
- Estimated Volume: $94.5million
- Prospectus
Yext provides businesses with the capability of easily managing their information across multiple digital outlets.
The company calls itself a “knowledge engine,” providing a platform where businesses can manage their digital knowledge in the cloud and sync it over 100 services that include Apple Maps, Bing, Cortana, Facebook, Google, Google Maps, Instagram, Siri, and Yelp.
Yext is headquartered in New York, NY. It was founded in 2006 and operated as an advertising services company, but in 2012 it sold its advertising business to IAC/InterActiveCorp in order to focus on becoming a leading digital knowledge software company.
Some clients who use Yext’s platform include AutoZone, Ben & Jerry’s, Best Buy, H&R Block, Citi, Marriott, Michael’s, McDonald’s, and Rite Aid.
The popular features of its platform only emerged in the past few years:
- Listings feature launched in 2011
- Pages feature launched in 2014
- Reviews feature launched in 2016
Yext’s “Knowledge Engine” platform supports over 17 million digital knowledge attributes such as address, business hours, menus, and professional credentials, and over 925,000 locations as of January 31, 2017.
Yext is a private company, but it won’t be for long. It’s expected to start trading on the NYSE on Thursday, April 13th and plans on selling 10.5 million shares in the price range of $8–$10, raising $84 million towards the lowest end or $105 million near the high end.
The company has raised $117 million in seven rounds of financing, and its underwriters include Morgan Stanley, J.P. Morgan, RBC Capital Markets, Pacific Crest Securities, and Piper Jaffray.
Unfortunately, Yext hasn’t directly indicated what it will do with the proceeds earned from its offering. But we can only hope that the company will choose to invest the money into expanding its international business or even into its research and development.
Yext is a fairly young company that’s developing itself in a new and growing industry, which makes it difficult to forecast where the industry is headed.
With that being said, it’s important to recognize that the market for cloud services continues to expand.
According to Transparency Market Research, the global market for Platform as a Service (PaaS) is projected to reach $7.98 billion by 2020.
It’s obvious that this market has the potential to expand in the upcoming years, but being a new company in a new industry does make things a little difficult, especially when it comes to predicting future market trends.
Currently, Yext isn’t profitable, another downfall for being a new company. However, it’s not all gloom and doom for this company… it has seen an increase in last year’s revenue by 38% — for fiscal year 2016, the company reported $124 million.
Yext’s revenue has been increasing for the past three years, but at the same time it’s still experiencing an increase in its net losses. In the past year, net losses have increased from $26.5 million to $43.2 million.
The company has outlined its strategies in its prospectus about how it will continue to increase revenue while hopefully (at the same time) reducing its net losses so it can finally start seeing some profitability.
Deven Parekh, managing director at Insight Venture Partners, had this to say about Yext: “The business is performing extremely well… We’re still early in the evolution of the market we’re in.”
Yes, Yext is a new company, and it’s operating in an industry that is also very new, and while that may seem risky or might leave some investors feeling ambivalent about the future of the company, I believe this company has potential to be an industry leader.
If it continues to dominate the U.S. market with its platform and is successful at building its international business, Yext could very well remain a strong leader in a growing industry.
Until next time,
Monica Savaglia
Wealth Daily
