binarypublish- Seattle-based marketing technology company Banzai has gone public via a SPAC merger with 7GC Holdings.
- The company’s shares, trading under the ticker BNZI, decreased by more than 40% on its first day of trading.
- An earlier plan to acquire digital marketing and sales company Hyros for roughly $110 million was called off.
Banzai, a Seattle marketing firm, went public on Friday by ringing the opening bell at Nasdaq, a year after announcing plans of merging with a SPAC group led by 7GC Holdings. This SPAC partnership is a combination of 7GC, a tech investment firm based in San Francisco, and SPAC sponsor Hennessy Capital. Banzai was founded in 2016 as an on-demand inside sales and marketing platform by ex-Avalara employees. The company has since made several shifts to help companies drive event registrations and focus on virtual events due to the pandemic impact.
During the event at Nasdaq, Banzai CEO and founder Joe Davy said, “Banzai started off with simple awareness of a growing problem in marketing tech and a simple vision that we could make things better.” He was in Times Square, accompanied by employees and partners. The SPAC process filings show that Banzai’s annual recurring revenue amounted to $22.1 million for the year ending Sept. 30, 2022, registering a net loss of $8.5 million.
Despite its clientele featuring major companies like Square, Hewlett Packard Enterprise, Thermo Fisher Scientific, Thinkific, Doodle, and ActiveCampaign, Banzai’s shares (under the ticker BNZI) fell by over 40% in its initial trading on Friday. It had earlier planned to acquire Hyros, a sales and digital marketing company, for estimated $110 million, a plan which was put off this year.
The method of using SPACs, or blank check companies, to take a private company public through acquisition gained momentum during the pandemic. However, the post-merger performance of SPACs dropped significantly in 2022 due to several factors including a broader market slowdown and an increase in the number of disrupted deals. According to SPAC Insider, there were 613 SPAC deals finalized in 2021 compared to just 30 deals in the current year.
