Seattle’s Banzai International Acquires Portland’s Act-On Software in a Strategic Move to Consolidate Marketing Technology Offerings
Banzai International, a Seattle-based marketing technology company listed on the Nasdaq, has announced its acquisition of Act-On Software, a Portland-based marketing automation company, for a total consideration of $53.2 million. This acquisition marks a significant step in Banzai’s growth strategy, aiming to consolidate its diverse marketing tools under a unified platform. The deal structure comprises $33.2 million in Banzai’s common stock and a cash payment of $20 million. Banzai projects that this acquisition will add $27 million to its revenue for the fiscal year ending December 31, significantly impacting its financial performance.
Act-On Software, founded in 2008, provides a comprehensive suite of marketing automation services catering to the needs of businesses seeking to enhance demand generation and consumer engagement. Its client roster includes notable names such as Hitachi, Best Buy, and Progressive Insurance, underscoring the platform’s capabilities and market reach. Banzai’s CEO, Joe Davy, characterized Act-On as "the most advanced marketing automation product on the market," highlighting its potential to serve as a central hub integrating Banzai’s current disparate offerings. Davy emphasized the strategic importance of Act-On, describing it as the core element that unifies Banzai’s existing tools, which he likened to "spokes" requiring a central "hub."
This acquisition marks the culmination of a successful journey for Act-On Software, which has raised over $82 million in funding from prominent venture capital firms such as U.S. Venture Partners (USVP), Technology Crossover Ventures (TCV), Norwest Venture Partners, and Beedie Capital. The successful exit is particularly significant for Voyager Capital, a firm that backed Act-On during a recapitalization phase in 2021 when it raised $20 million. While the majority of Act-On’s 100+ employees will transition to Banzai, Kate Johnson, the current CEO of Act-On, will not be joining the combined entity.
The Act-On acquisition is the third strategic move by Banzai within the past two months. Prior to this, Banzai acquired OpenReel, a business-focused digital video creation platform, for $19.6 million. Additionally, Banzai announced the impending acquisition of Vidello, a provider of video hosting and marketing technology for businesses, in a deal valued at up to $7 million. These consecutive acquisitions demonstrate Banzai’s aggressive pursuit of growth and its commitment to building a comprehensive marketing technology ecosystem. Banzai’s financial capacity for these acquisitions is bolstered by a $100 million investment agreement with Yorkville Advisors, providing the necessary capital for its expansion strategy.
Banzai’s history traces back to 2016, founded by former employees of Avalara. Initially conceived as an on-demand platform for inside sales and marketing, Banzai has evolved its offerings to encompass a broader range of marketing tools, including content creation and virtual event management. This expansion reflects the changing landscape of marketing and Banzai’s adaptability in providing solutions to meet evolving business needs. Looking forward, Banzai envisions becoming a leading provider of AI-powered marketing technology solutions aimed at simplifying and enhancing the marketing process for its customers by 2025. This vision underscores Banzai’s commitment to innovation and its anticipation of future trends in the marketing technology sector.
Banzai’s recent financial performance indicates a growing business, although still operating at a loss. As of September 30, 2023, Banzai reported annual recurring revenue of $4.4 million, demonstrating a 7% sequential growth from the second quarter. While the company reported an adjusted net loss of $1.45 million, this represents a significant improvement of $3 million compared to the previous period. Banzai held $4.3 million in cash reserves as of September 30, 2023. The influx of revenue from the Act-On acquisition, combined with the strategic integration of its technology, is expected to play a crucial role in Banzai’s path towards profitability and further solidify its position in the marketing technology landscape.
Banzai’s strategic acquisition of Act-On Software demonstrates its commitment to building a robust and integrated marketing technology platform. By combining Act-On’s sophisticated marketing automation capabilities with its existing offerings, Banzai positions itself to offer a more comprehensive and valuable solution to its clients. The acquisition also reflects the broader trend of consolidation within the marketing technology sector, as companies seek to provide all-in-one solutions to meet the increasingly complex needs of businesses in the digital age. Banzai’s vision for an AI-powered future further highlights the importance of innovation and adaptation in this rapidly evolving industry. The financial backing from Yorkville Advisors provides a solid foundation for Banzai’s ambitious growth strategy, enabling the company to pursue strategic acquisitions and invest in the development of cutting-edge marketing technologies. The successful integration of Act-On, along with the previously acquired OpenReel and Vidello, will be crucial to realizing Banzai’s vision and achieving sustained profitability.
