Industry consolidation continues apace in the sales and marketing intelligence industry. This afternoon, DiscoverOrg announced the acquisition of Zoominfo, just eighteen months after acquiring RainKing. Zoominfo acquired technographics vendor Datanyze in September, so DiscoverOrg will be integrating both a contacts vendor and a technographics vendor.
The acquisition moves DiscoverOrg into the number two position in the Sales and Marketing Intelligence space with $230 million in joint revenues. Only LinkedIn Sales Navigator has a larger market share.
Debtwire leaked the deal on January 25th indicating that “Zebra” was a direct competitor. According to Debtwire, DiscoverOrg was “pitching its unrated buyout loan package on strong recent growth and a story that the whole will be greater than the sum of its parts, said five buysiders familiar with the deal. Meanwhile, levering up the capital structure draws attention to the borrower’s ability to meet synergy projections – which could crimp its free cash flow, especially amid an ambitious technology integration plan, they said.”
Debtwire indicated that the acquisition was priced at $800 million, a three-fold increase from Great Hill’s summer 2017 acquisition price of $240 million for Zoominfo. Debtwire also indicated an FY18 management adjusted EBITDA of $62.7 million for DiscoverOrg and $17.7 for Zoominfo.
Revenue growth for both companies is strong. DiscoverOrg has made the Inc. 5000 list for eight straight years and Zoominfo for the past four years. Debtwire indicated revenue growth figures of 26% and 30% over the past two years for DiscoverOrg with revenue hitting $152 million in 2018. Zoominfo has grown at an even faster pace over the past two years with growth rates of 63% and 44%. Thus, Zoominfo revenue grew from $39 million in 2016 to $91 million last year.
Based on the Debtwire revenue numbers for 2018 and historical revenue figures from the Inc. 5000 list, DiscoverOrg had a seven-year CAGR of 61% and Zoominfo of 34%. Zoominfo’s growth rate is mostly organic while DiscoverOrg’s organic seven-year CAGR, after adjusting for RainKing revenue, is around 53%.
The two firms are strongly complementary. Zoominfo provides the deepest set of B2B emails and direct dials with content mined from email signature blocks. DiscoverOrg offers deep technology profiles (technographics and project plans) alongside human verified bios (skills, responsibilities, education, work histories, emails, direct dials, and social links), org charts, and company profiles. DiscoverOrg’s human verification supports a 95% data quality SLA for its contacts. Zoominfo’s Datanyze acquisition provides DiscoverOrg with additional NLP tools for determining products and vendors alongside market share analytics tools for marketing and competitive intelligence teams.
“Business data is rapidly changing and your data platforms must be built to adapt,” said Zoominfo CEO Derek Schoettle in September. “ZoomInfo has the largest, most complete data set of companies and contacts and a goal to enable our customers to automate, process, curate, and present the data on-demand and in real-time. Delivering industry-leading technographics, the Datanyze technology will be a significant addition to help us deliver the right data, at the right time, to the right person.”
“DiscoverOrg’s deep, research-verified, actionable insights coming together with ZoomInfo’s comprehensive coverage of 100M business professionals is an unrivaled combo,” said the firm. “We each employ different, but highly advanced technologies and tools to gather, cleanse, and maintain at an unparalleled scale.”
“To effectively capitalize on growth opportunities, companies of all sizes need accurate firmographic, technographic, contact, and intent data. Combined, DiscoverOrg and ZoomInfo deliver the trifecta: B2B data of the highest quality, quantity, and depth.”
DiscoverOrg CEO Henry Schuck
Over the past few years, sales intelligence has moved from a standalone browser research service for sales reps to an integrated workflow solution tied into CRMs, Marketing Automation Platforms, Sales Engagement Platforms, Chrome Browsers, and email. DiscoverOrg has been at the forefront of these integrations with a broad set of platform connectors. CEO Henry Schuck emphasized these workflow tools during the announcement. “High-quality data is the fundamental go-to-market requirement for growth. In the near future, CRM and marketing automation systems will be defined not by their empty-box capabilities – but by the data that is housed inside them.”
While highly complementary, the combined companies remain weak with respect to deep company profiles. DiscoverOrg recently added family trees, but they are to the subsidiary level, not branches. They also lack public company financials, US and UK filings, SWOTs, and industry research.
When DiscoverOrg acquired rival RainKing in August 2017, CEO Henry Schuck stated the following goal, “The path to rapid revenue growth is paved with highly accurate, actionable, and predictive sales and marketing data, and the combination of RainKing and DiscoverOrg means that our joint customer base has access to an extraordinary portfolio of data, contextual buying insights, and predictive intelligence. We are building a company that is to sales and marketing intelligence what Salesforce is to CRM.”
Schuck’s vision was updated today:
“Every sales and marketing team will have a go-to-market operating system that identifies the prospects that should be engaged every day, week, and month based on buying signals and intent data collected in a multitude of different ways. Even better, they have deep insights on the buyers who are making the purchase decisions with accurate contact, org chart, technographic, and firmographic data. It’s all at their fingertips and it’s all served to them dynamically – wherever they are working.”
DiscoverOrg stated that support, service, and sales for all products will continue. Both platforms will be sold for the next six to twelve months “with highly coordinated sales and marketing efforts to ensure customers realize the most value from the platform(s) that best serve their needs.” In March, joint customers will have a light integration between the two platforms followed quickly by DiscoverOrg customer access to Zoominfo company and contact data.
“As we combine the best of both platforms over the next year, customers will have the best, bar-none, B2B intelligence platform -the highest quality data with the broadest coverage and deepest actionable insights,” said the firm.
The combined company has 15,000 active customers and 120,000 active users, with the Zoominfo acquisition trebling the customer count.
DiscoverOrg stated that there are no plans to shutter any of Zoominfo’s locations and that hiring will continue for all Zoominfo offices. Zoominfo has more than doubled its staff over the past year with headcount spread over six locations: Waltham (MA), San Mateo (CA), Grand Rapid (MI), St Petersburg (Russia), Kazan (Russia), and Ra’anana (Israel). Zoominfo moved into a new headquarters location in Waltham, MA just last month. The lease provides space for up to 450 employees. Globally, DiscoverOrg has over 1,000 employees.
DiscoverOrg’s investors include TA Associates, The Carlyle Group, and 22C Capital.