Welcome to the week!
Sure, the technology and business worlds are busy digging through a deluge of Facebook-focused reporting ahead of the social media company’s earnings report, but we have other work to do.
Namely, the Braze IPO filing. The New York City-based company focuses on customer engagement software. We’ll get into what that means in a little bit.
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For background, Braze raised around $175 million while private, most recently raising a September 2018 round that put $80 million into its account and afforded Braze an $850 million post-money valuation. PitchBook and Crunchbase agree on the numbers.
Our task this morning is to understand what Braze does, get our hands around its financial performance, and then chat a bit about what the company may be worth. Sound good? Let’s do it.
What does Braze do?
In broad terms, Braze links with customer software systems to collect consumer data, automatically sorting consumers into segments. From there, the company’s software can send “contextually relevant” notes to consumers, personalized based on what Braze has learned about the person or persons in question. Those messages can be sent both inside of customer products or outside through third-party channels.
The underlying logic is that consumers expect customization today, and that data is the way to pull off the task. Braze makes lots of noise in its filing about how many companies’ customer data is siloed inside individual applications today. In contrast, Braze offers a method of centralizing consumer data, which, in theory, allows for a more holistic view of a customers’ consumer base. With that view in hand, customers can make better marketing decisions, with Braze helping companies get tuned messages out to end users.
As you can imagine, we’re talking about a software-as-a-service product, though the company does have a dusting of on-demand revenues, which we’ll get to in the next section.
Braze’s service has a large in-market footprint. The company claims in its S-1 filing that it powered “interactions with 3.3 billion monthly active users via our customers’ apps, websites and other digital interfaces in July 2021.” That figure was 2.3 billion in January 2020 and 1.6 billion in January 2019.
How does that rising usage of the Braze platform translate into revenue? Let’s find out.
Is that a good business?
Braze is a pretty good business.
The company has released data through the July 31, 2021, quarter. We should get an early look at its October 31, 2021, quarter in a following S-1 filing.