Zeta Global Acquires Boomtrain For Personalization Technologies

Summary

• Marketing technology 'unicorn' Zeta Global has acquired Boomtrain for an undisclosed sum.
• Boomtrain has developed marketing personalization capabilities using machine learning and AI-derived technologies.
• The technology will power the marketing personalization engine within ZetaHub, Zeta's flagship platform for digital marketers.

Quick Take

Advertising technology ‘unicorn’ Zeta Global (NYSE:ZETA) has acquired mobile messaging personalization company Boomtrain for an undisclosed amount.

Boomtrain has developed machine learning- and AI-driven marketing system for brand marketers to more effectively manage their messaging campaigns with consumers.

Zeta is executing on its business plan of smartly acquiring the technologies to power its cloud-based suite of digital marketing solutions.

Target Company

San Francisco-based Boomtrain was founded in 2012 to create a platform to assist brand marketers to more efficiently communicate with prospects and customers using its four main functional feature sets:

• Content Personalization
• Product Recommendation
• Omnichannel Marketing
• Prime Time Messaging

The company was co-founded by CTO Chris Monberg, who will become CTO at Zeta Global.

Below is a brief demo video about Boomtrain’s approach:

(Source: Boomtrain)

Boomtrain has divided its solution into six separate products, all of which are powered by its algorithm engine:

• Marketing Automation
• Onsite Recommendation
• Email Marketing
• Mobile Push
• Messenger
• Lightbox

Furthermore, it has customized its offerings for the Media & Publishing and Retail verticals.

Investors in Boomtrain invested nearly $15 million in disclosed funding and included venture capital firms Sierra Ventures, Crosslink Capital, Lerer Hippeau Ventures, Cota Capital, Streamlined Ventures, and others.

Acquisition Terms and Rationale

Neither company disclosed the amount or terms of the transaction.

Given Zeta’s recent fundraise of $140 million and its preference for ‘team and tech’ acquisitions, the purchase price was likely below $50 million, although estimating private company transaction amounts is difficult. What could push the deal price higher would be how much Zeta wanted Boomtrain’s machine learning technology for its personalization engine.

I previously wrote about Zeta Global’s financing round in my article, Zeta Global Raises $140 Million For Acquisitions.

In that April 2017 piece, I interviewed Zeta Global CEO David Steinberg on the company’s prospects and highlighted a few relevant points regarding its M&A ambitions:

Zeta is ‘keenly interested in intriguing team and technology acquisition opportunities regardless of the size of their customer base. They have ‘typically looked outside our existing vendor base for M&A opportunities.’

Boomtrain has been in existence for five years, and its customer base includes CBS, Dow Jones and other publishing and retail clients.

For Zeta, machine learning and AI technologies have been a focus for the firm for several years. It has a number of relevant patents in the area of machine learning and says ‘Boomtrain’s technology will become the personalization engine with ZetaHub,’ its flagship digital marketing system.

As CEO Steinberg stated in the deal announcement,

My co-founder John Sculley and I believe machine learning will fuel next-generation marketing technology. This acquisition accelerates Zeta's already significant investments and achievements in machine learning to enable the world's leading brands to deliver 1:1 marketing at scale.

It seems clear from my discussions that although Zeta is picky in its acquisition process, it is not wasting any time as it assembles the technology it believes is necessary to drive the future of digital marketing.

In today’s environment, that technology is AI- and machine learning-based and relies heavily on algorithms that can adapt to user and network activity in real-time.

I expect to see additional acquisition activity from Zeta in the months ahead as the highly competitive digital advertising space continues its technology-driven advance.

I write about M&A deals, public companies that invest in technology startups and IPOs. Click the Follow button next to my name at the top or bottom of this article if you want to receive future articles automatically.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.