Another Winner for the Tech Sector with Yext Inc.
Yext Incorporated is a software development company that specializes in mapping businesses on the internet. By use of the firm’s excellent tools, corporations can view their search engine precedence, customer location and trends and find out how they can market themselves to the public in more superior ways. Further, Yext assists businesses with their online outlook thereby widening the online reach of these companies. As such, the corporation helps other companies improve their prospects to gain more clientele. With its headquarters in New York, the firm was founded in 2006 by Howard Lerman, Brent Metz, and Brian Distellburger.
This company that gives businesses digital facelifts went public on April 13th this month in the first issuance the technology sector has seen in the second quarter of this year. Initially, Yext had set terms to sell its shares in the range of $8 – $10. However, the high demand for the shares shown by the offering being oversubscribed many times over coupled with the high growth rate of the company caused underwriters in conjunction with the firm to increase this price to $11. The company offered 10.5 million shares at this price thereby generating a revenue of $115.5 million from the issuance. Further, the company’s bookkeepers could exercise their overallotment option and purchase an additional 1.6 million units of the class A stock at the IPO price. This would bring the total amount of revenue raised from the deal to an estimated $133 million.
The underwriters for Yext’s offering included Morgan Stanley, J.P. Morgan, and RBC Capital Markets. Apart from these institutions gaining their cut from the issuance, the company plans to use the revenue to improve its tools such as the Yext Knowledge Base as well as for returns to its investors. Yext has had seven rounds of funding in its existence, with major firms that are currently shareholders in the company being Sutter Hill Ventures, Institutional Venture Partners, Crunchfund, Grape Arbor VC, SV Angel and WGI Group. Major individual shareholders include Brent Metz, Brian Distellburger, Howard Lerman and Michael Walrath. These rounds of funding and the issuance soon after had Yext command a valuation of $1.1 billion after the offering.
Yext appeared on the New York Securities Exchange under the ticker ‘YEXT’ for an encouraging premiere. On its first day trading, the company’s stock rose by just under 22 percent. The shares opened at $14 on Thursday morning and ended the day pegged at $13.14, a $2.14 increase from its issuance price. It appears the firm has well-utilized the positive IPO markets as well as growing investor demand for tech offerings to acquire significant amounts of revenue. In an interview with the press, current Yext CEO Howard Lerman said the team plans to take the firm’s Knowledge Base tool to new levels where it provides single, highly-accurate answers to fundamental questions users might look for online. These could include the location of the nearest restaurant, park or institution such as school. Currently, Yext’s tool is popularly used by Apple’s Siri to provide different answers to iPhone users.
Apart from information on locations, Yext also uses its cloud-based tools to provide users with reviews and additional data on business operations.