Marketing Technology Startup Banzai Acquires Hyros for $110 Million

Banzai, a marketing software startup in Seattle, announced that it will go public after agreeing to merge with a special purpose acquisition company. The company also said it will pay $110 million to acquire marketing optimization startup Hyros after the SPAC deal closes. Founded in 2016 by former Avalara employees, Banzai initially started as an on-demand internal sales and marketing platform. It then shifted to help companies register for events. Then, when the pandemic hit, it returned to focus on a virtual event marketing solution.

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"An End-to-End Video Engagement Solution Providing a Platform of Powerful Marketing Tools"

The 94-employee startup describes its product as "an end-to-end video engagement solution that provides a fast, intuitive and powerful platform of marketing tools that create more purposeful videos, webinars, virtual events and more." SPAC is managed by 7GC Holdings, led by Jack Leeney and CFO Christopher Walsh. 7GC Holdings is a joint startup with Berlin-based Hennessy Capital. The management team also helped Seattle company Porch go public through SPAC. Joe Davy, CEO and founder of Banzai said,

Special purpose acquisition companies (SPACs) have largely re-emerged in the pandemic's low interest rate environment, as capital flows into start-ups and entrepreneurs use SPACs to enter public markets faster. But the performance of post-merger SPACs has steadily declined, especially since January, due to the larger downturn in the market. More than 55 SPAC transactions have been canceled this year. The traditional IPO market has also softened. 7GC was set to take Vice Media public in August 2021, but both sides have reportedly shelved those plans.

Combined Company to be Named Banzai International and Listed on Nasdaq Capital Market

Following the merger between Banzai and 7GC, the combined company will have a post-deal enterprise value of $380 million. The company has raised an additional $100 million from GEM through an equity facility. Davy;

An investor presentation for the deal shows Banzai posted a net loss of $8.5 million for the 12 months ending September 30, 2022, and generated annual recurring revenue of $22.1 million. The startup serves more than 7,200 customers in 28 countries. To date, Banzai has not disclosed how much total funding it has raised. The company said it raised a total of $21.2 million when it raised $15 million in startup debt financing in March 2021. Banzai competes with London-based virtual events startup Hopin, which raised $400 million last year in a $7.75 billion deal. Other competitors include San Francisco-based Hubilo, which raised $125 million last year.