PE-backed ZoomInfo IPO raises $1bn

August 2020 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

August 2020 Issue

In the largest US technology listing of 2020 so far, go-to-market intelligence platform ZoomInfo Technologies has raised almost $1bn after its initial public offering (IPO) sold 44.5 million shares at $21 per share – toward the higher end of its target range.

ZoomInfo’s listing is the latest in a series of IPOs in the US in recent months, underlining a rebound in the market for new stocks following the outbreak of the coronavirus (COVID-19) pandemic. ZoomInfo shares are trading on the Nasdaq under the trading symbol ‘ZI’.

Backed by private equity firms Carlyle Group and TA Associates – which own a 60 percent stake in the firm – ZoomInfo began discussions for an IPO last year but paused preparations due to volatile financial markets – a move which coincided with a surge of interest from potential investors, with new business rising 87 percent in April year-on-year (YOY).

Even so, the decision to go public – at a time when the US was embroiled in the COVID-19 crisis as well as countrywide protests against racism – remained questionable. According to Renaissance Capital, IPO activity had plummeted by 36 percent, with just 38 public offerings, while total proceeds are 51 percent below the same time last year at $11.8bn.

With strong expertise in cleaning business-to-business (B2B) data, ZoomInfo’s 300 research analysts deliver high-quality intelligence at scale by leveraging an artificial intelligence (AI) and machine learning-powered engine that gathers data from millions of sources and standardises, matches to entities, verifies, cleans and applies the processed data to companies and people.

Furthermore, ZoomInfo provides software, information and insights that give companies a 360-degree view of their customers and their prospects. It also provides contacts, technology stack data, direct-dial phone numbers, email addresses, corporate hierarchy information, location maps and hundreds of additional fields.

“For sales and marketing professionals, hitting their number is an emotional, professionally defining or debilitating moment that comes at the end of every month, every quarter and every year,” said Henry Schuck, founder and chief executive of ZoomInfo. “Their number is their scoreboard and whether they hit it or not is binary. Promotions, bonuses and feelings of accomplishment are linked to that number – you either hit it, or you miss it, there is nothing in between.

“If that does not sound challenging enough, the ability to successfully, repeatedly and predictably hit that number month-in and month-out is rife with additional roadblocks, difficulties and systemic flaws,” continued Mr Schuck. “Territories are poorly mapped, targeting is weak, data in customer relationship management (CRM) systems is incomplete and inaccurate. Sellers waste inordinate amounts of time researching, marketing campaigns go out to random companies at random times and money is spent in horribly inefficient ways.”

ZoomInfo, formerly known as DiscoverOrg, was cofounded in 2007 by Mr Schuck. In February 2019, DiscoverOrg acquired Zoom Information, and the combined business was rebranded as ZoomInfo. The acquisition combined the technologies of both companies to provide broader coverage and higher-quality insights.

“This is a company that stands on the shoulders of its employees who have made countless heroic efforts over the years,” concluded Mr Schuck. “They have come in early, stayed late and refused to lose every step of the way. They are the difference makers. It is because of them that I know ZoomInfo’s best days are ahead of it.”

With ZoomInfo’s near $1bn IPO implying a market cap of $8bn, or $14bn when trading in public markets, the inference is clear: even amid a pandemic crisis and paralysing protests, investors are still hungry for new investments.

Fraser Tennant