Yext, a company that helps businesses synchronize their data across local search services and their own websites, is announcing that it has raised $50 million in Series F funding.
Co-founder and CEO Howard Lerman described this as “pre-IPO financing.” He didn’t get much more specific than that, but he did say that Yext “makes most sense as an independent company” and that he intends to take the company public at some point.
The round was led by Insight Venture Partners with participation from Marker, Institutional Venture Partners, and Sutter Hill Ventures. A source with knowledge of the company said the Series F valued Yext at
$520 $525 million.
Yext launched as a pay-per-call advertising business at the TechCrunch50 conference in 2009, but eventually shifted to its current focus on “geomarketing software” and sold the ad business to IAC’s CityGrid Media.
Yext says it now handles data for more than 300,000 active locations and saw $34 million in revenue last year, an increase of 136 percent from 2012. Lerman said he’s aiming for $55 million this year. That may not be a particularly tough target, since Yext has already hit a $55 million run rate.
Since the company found its current business model, Lerman has emphasized that it’s a software-as-a-service company, with reliable subscription revenue (as opposed to an ad business where revenue is more variable). When I brought up the reported delay of Box’s IPO, Lerman suggested there’s been “a compression in SaaS multiples over the past quarter or two,” but he said Yext stands out because it has “a really strong tack toward free operating cashflow,” and should be profitable in 2015.
Lerman also pointed to the ongoing growth of mobile advertising as a big opportunity: “We’ll never be in the middle of an ad buy, but in order to conduct location-based mobile ads, you actually have to have local content.” And businesses can use Yext to manage that content, particularly when they’re dealing with multiple locations that are listed on multiple websites.
The company plans to spend the new money on continued research and development, and on international expansion — it says it will launch in Germany, Australia, the United Kingdom, and Canada later this year. The company also made its first acquisition about a month ago, and Lerman said the additional funding could certainly be used to do more buying.
“We’re in aggressive expansion mode, all around,” he said.
Yext has now raised more than $115 million. Before this, its most recent round was a $27 million Series E that I’d heard valued the company at $270 million.