ExactTarget’s Backers to Hit Bull’s-Eye With Salesforce Deal

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by || 06/05/2013

More than a year after ExactTarget’s initial public offering, its venture investors are poised to reap big gains with the company’s proposed $2.5 billion sale to Salesforce.com.

The deal shows the growing importance of marketing software–a sector that has seen several recent, and large, acquisitions and dozens of venture capital investments as marketing and advertising shifts from an industry run on instincts to one that runs on data.

“Digital advertising and digital marketing is more important as more people go online and stay online through a big portion of the day,” said Scott Maxwell, a member of ExactTarget’s board.

Since 2009 ExactTarget has raised at least $175 million from its venture investors. A filing with the Securities and Exchange Commission shows an additional $40 million that the company has not confirmed.

None of the company’s venture investors sold any shares during ExactTarget’s March 2012 IPO. Most sold parts of their stakes in a secondary offering in September for $22.50 per share. They also let shares go over a period when the share price ranged from about $17 to $25, significantly less than Salesforce.com‘s $33.75 per share offer.

Greenspring Associates will be the big winner when the deal closes. Unlike other investors, it had picked up shares since ExactTarget’s IPO. The Salesforce deal values its holdings at $343.6 million.

Technology Crossover Ventures, the largest shareholder at the time of the IPO, still retains a stake worth $288.2 million. It has previously sold or distributed somewhere between $120 million and $141 million worth of stock.

Battery Ventures still holds $153 million of stock and has previously unloaded between $102 million and $127 million. Scale Venture Partnersholds $59.3 million and previously sold or distributed between $44 million and $55 million.

ExactTarget was founded in 2000 as an email marketing company serving midsized businesses. Since then it has expanded its offering, often through acquisitions, to position itself as a hub of many marketing channels and services, including social marketing, mobile marketing and marketing automation.