Local-Focused Cloud Marketing Service Yodle Files for $75M IPO

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Yodle, a provider of cloud-based marketing automation solutions for local businesses, has filed for an Initial Public Offering aimed at raising $75 million which will help the company expand its sales efforts, channel partnerships, distribution channels, and global market penetration as well as enhance its core marketing products.

With additional funding, the company will also be able to pursue more strategic acquisitions, which have been a major tool for Yodle. It bought relationship marketing software provider Lighthouse Practice Management Group in 2013 and local SEO provider ProfitFuel in 2011.

The Yodle platform currently provides customers with an online, mobile and social presence, as well as automating, managing and optimizing their marketing activities and other consumer interactions. It also offers web hosting services. As of March 31, the company had more than 44,000 customers.

With the number of local businesses worldwide estimated at around 74 million, according to AMI-Partners, Yodle sees tremendous opportunity to expand through different verticals and geographies. BIA/Kelsey estimates that local digital advertising spending will increase from $28 billion in 2013 to $53 billion in 2018.

According to the IPO filing, Yodle had revenue of $162 million in 2013, up 22 percent from $132 million in 2012, however it was not turning a profit. It lost $5 million in 2012, and $10 million in 2013.

Yodle’s IPO filing reveals several hurdles in digital local marketing. Aside from consumer review websites such as Yelp and Angie’s List, Yodle lists among its competitors web hosting companies including EIG, GoDaddy, Main Street Hub, Web.com and Wix, which offer customers tools for local marketing. Also, as search engines act more like online business directories, this also raises the likelihood that businesses won’t see a need for buying local marketing tools.

However, Yodle’s approach combines technology, data collection, analytics and process automation to help differentiate itself. It offers direct-to-consumer products (Marketing Essentials, Centermark and Lighthouse) but also channel revenue through its Yodle Ads media product, which resellers can use to automate, manage and optimize their customers’ media spend across mobile and desktop search engines.

Many companies in the cloud services space have recently announced intentions to gain listings on the stock market including China’s Alibaba Group, web host GoDaddy.

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