Yext Joins $1B Club With Successful IPO
April 13, 2017
Yext Joins $1B Club With Successful IPO, Continuing Software's Hot Market Run
By Alex Konrad Senior editor covering venture capital and startups Published Apr 13, 2017
Credit: NYSE
Yext wasn’t quite a unicorn as a private software company. After its first day trading on the New York Stock Exchange, it’s even better: a $1 billion public one instead.
Yext drew healthy interest from investors on its first day of trading, with shares trading as high as $14.25 after pricing at $11 for its IPO. Shares were up 25% as of 2:15 pm, boosting the company’s market cap to over $1.1 billion. Yext’s last private valuation in 2014 had been $525 million, per PitchBook.
Following Okta’s IPO and other tech exits like AppDynamics’ $3.7 billion acquisition by Cisco, Mulesoft, and Snap, Yext’s offering was smaller in scale. The company lost $43 million on $124 million in revenue in its last fiscal year.
Yext was repurposed by CEO Howard Lerman about five years prior, selling its profitable ad business to IAC for $30 million, and pivoted to helping companies manage digital listings across over 100 providers including Apple, Google, and Facebook.
While many tech companies avoid public markets due to their structure and accountability demands, Lerman says Yext’s subscription model and customer base made going public a fit. As a software company with financial services clients, Yext already had the auditing requirements in place.
Despite being founded in 2006, Yext jumped into the public markets sooner than many peers. Lerman claims the IPO serves as an extraordinary marketing event:
“A lot of folks hadn’t heard of us before today. It’s an extraordinary marketing event,” says Lerman. “This is a winner-take-all market, and this IPO gives us the credibility, capital, and awareness to accelerate what we do.”
Yext’s ambition is to lead in "digital knowledge management." With micro-services booming to answer questions like where to eat, find a local expert, or a business’s hours, Yext ensures consistent and structured business data across all platforms—from Google to Siri and Alexa.
Examples include:
- Returning specific SUV availability in a local area
- Finding orthopedists who accept specific insurance
- Displaying correct restaurant menus behind the scenes
Lerman compares Yext’s role to providing the "picks and shovels" of the gold rush, powering the information behind other consumer-facing services.
He also acknowledges the importance of speed:
“We wanted to get out there and win,” he says.
Yext claims it’s chasing a $10 billion+ market and is heavily investing in sales and marketing, with flexibility to pull back spending if necessary.
Follow Alex Konrad: