Zeta Interactive Raises $125 Million From GSO to Fuel Deals

Zeta Interactive Corp., a provider of digital marketing software, raised $125 million in debt and equity from the credit unit of Blackstone Group LP to fuel acquisitions.

Zeta will use most of the capital to accelerate deals, the New York-based company said Wednesday in a statement. Chief Executive Officer David Steinberg said that the company, which hasn’t raised money in three years, needed the funds to add new technologies.

“What we found was, as we wanted to take the business to the next level, it made sense for us to raise,” Steinberg said by phone. “The primary acquisition targets are great technologies that we can merge with our platform.”

This round of funding, through GSO Capital Partners, values the company at more than $1 billion, a person with knowledge of the matter said, asking not to be identified because the details are private. Steinberg declined to comment on the company’s valuation.

As of Tuesday, there were 118 private companies in the world valued at more than $1 billion, according to data from CB Insights. This year alone, about 40 companies have reached what is called unicorn status, a term intended to convey their rarity. The pace of companies joining those ranks has accelerated as investors pour capital into the tech industry.

Consumer Data

Zeta is especially interested in acquiring analytics and machine-learning technologies, Steinberg said. The software-as-a-service provider also plans to make one or two acquisitions to expand its business in western Europe, he said.

The company was founded in 2007 by Steinberg and John Sculley, former CEO of Apple Inc. and PepsiCo Inc. It uses a “big data” marketing platform based on more than 350 millon consumer records, according to its website.

Originally built as a digital marketing service, Zeta pivoted four years ago to focus on providing customers with a software platform to manage and analyze relationships and deploy marketing campaigns. It reported 2014 revenue of more than $100 million and projects that will more than double this year, Steinberg said.

Debt made up more than half of the financing, and GSO will take a minority stake in Zeta, Steinberg said, declining to provide specifics. William Blair & Co. advised Zeta on the fundraising.

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