Yext Raises $50 Million to Build Local-Business Directory
Wall Street Journal
By: DOUGLAS MACMILLAN
Three years after overhauling its business model, the New York-based startup Yext has raised a large round of funding and is predicting its first profit next year.
Yext, an online-marketing tool for brick-and-mortar businesses, closed $50 million in funding led by Insight Venture Partners, co-founder and chief executive officer Howard Lerman said in an interview. The investment values the eight-year-old company at $525 million, said a person familiar with the deal who asked not to be identified.
The company helps retailers and other businesses with local storefronts make sure all of their pertinent details–phone numbers, addresses, photos–stay current across dozens of directory sites, from Google to Yahoo Local to Foursquare. Large national retailers with around 1,000 stores pay Yext an annual fee of close to $215,000 to use these tools, Lerman said.
“If you’ve ever found the wrong information in a map, we set out to solve that problem,” he said.
The new funding suggests that Yext’s new direction may be working after the company sold off its earlier product, a click-to-call advertising service that InterActive Corp. bought in 2011. That business was challenging because it was limited to a small set of advertisers.
By contrast, Yext is now creating a kind of universal online directory that appeals to a broad range of businesses, Lerman said.
Yext plans to generate $55 million in sales this year, up from $34 million last year, Lerman said. In 2012, the company had revenue of $14 million.
While the company is not yet profitable–Lerman says it will burn about $6.5 million this year–it expects to be next year. It currently has 270 employees.
Yext may consider an initial public offering as early as next year, Lerman said, though the fresh capital “gives us the resources to delay it a little bit.”