Marketing analytics company Zeta Interactive has acquired eBay Enterprise's customer relations management division for an undisclosed sum of money, though sources close to the deal tell us that it's for an amount between $80 million and $90 million.
The acquisition is happening concurrently with the sale of other eBay (EBAY) Enterprise businesses to a variety of private equity firms.
The company was founded by serial entrepreneur David Steinberg and former Apple CEO John Sculley in 2007 to help businesses make sense of their data. Zeta Interactive's software gathers and organizes information pertaining to customer demographics, psychographics (what they suspect a customer might think), and behavior. Once the optimal customer attributes are identified -- say, males aged 32 to 44 who live in the suburbs and drive SUVs -- Zeta can pull from its own proprietary database of 350 million people and help market to those who match those characteristics. You might consider it a search engine not of websites, but of people to sell to.
Zeta Interactive's business is helping other businesses acquire new customers and retain the ones they already have -- Steinberg says 70% of Zeta's efforts are in new customer acquisition and 30% are in retention, though the eBay deal will "move this closer to 50-50." Simultaneously, the acquisition will bring 150 new enterprise customers to Zeta Interactive's marketing cloud, significantly increasing company revenue; it already had some 720 customers in 2014.
The company can also serve as an effective diagnostic tool for when a company notices a decline in its customer base. By using Zeta Interactive's platform to analyze the data of the last several thousand people to stop using a service, companies can more thoroughly understand the type of person who's moving away from them and take steps to combat it.
"Big data" is the term given to sets of information so large that they become unwieldy for all but specialized computer applications to process in a meaningful way. Zeta's software is designed to rapidly analyze the disparate pieces of customer information such that the business might harness it and grow; it facilitates mathematically assisted marketing.
"We're the geeks in this field," said Steinberg in an interview. "We don't do the creative; we plug into agencies that do the creative. We're all about the data analytics and math telling us which campaigns will run."
While invisible to the standard consumer, Zeta Interactive's software works through creative marketing types to help identify publicity campaigns that will yield the highest clickthroughs and purchase rates.
"We now have our hands full integrating our assets," said Steinberg. "We recently raised $125 million, and we're migrating and growing this business again. The question now is: how do we grow the merged company?" It seems that Zeta Interactive aims to do so by expanding internationally. The company was most recently in the news for making moves in India, hiring talent to expand its operations there. It also recently opened a 37,000-square-foot facility in the country, which Steinberg said was done specifically to support the eBay deal.
The company is growing rapidly in size, reach, and valuation. Post-acquisition, Zeta Interactive will expand from 600 to 1,000 employees. Steinberg said the business grew more than 70 percent last year, and that "it will organically grow 40 to 50 percent more after the eBay deal."
Perhaps most compellingly, Zeta Interactive can reportedly lay claim as of July to being a "unicorn" company, a privately held operation worth at least $1 billion. As eBay's CRM division includes a host of data-driven marketing businesses, Zeta's acquisition stands to only make the company more robust in its mathematical approach to marketing.