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Snapshot: Pivotal Veracity Email Deliverability

Pivotal Veracity offers email deliverability services. That is, if you send a lot of email, it helps you make sure as much of it gets through to recipients as is possible.

Technology Summary: Main Features

  • Advises on the likelihood emails will be interpreted as spam.
  • Tracks the extent to which emails are delivered, and the causes for nondelivery.
  • Helps you identify and correct where your emails are blacklisted or blocklisted, and take corrective action.
  • Helps you get on whitelists.
  • Rendering: Helps you ensure recipients see email in the way you expect them to, irrespective of the software and hardware they use. For all the main webmail and rich email clients, as well as the main mobile platforms (Symbian, Apple iPhone, Blackberry, Windows Mobile, etc.).
  • Checks emails for many common faults, such as invalid URLs, slow rendering over dialup lines, and typos.
  • Delivered as hosted service/SaaS.

Illustrative Pricing

  • Average price is $2,500/month for a one-year license.

Main Types of Customer

  • Large corporations, such as Amazon, American Express, Cisco, Dow Jones, IBM, Oracle, Nestle, Progressive, and Subaru.
  • Email service providers, such as Acxiom Digital, Digital River, Exact Target, Responsys, Silverpop, and Yesmail.
  • Advertising agencies, such as Avenue A/Razorfish, MRM Worldwide, Rapp Collins, and WPP.

Competition

  • Main competitor is Return Path/Habeas.

Competitive Strengths as Perceived by Company

  • Much higher levels of functionality for large corporations and ESPs.

Financial Summary

  • Privately held; company doesn’t disclose revenues.
  • FRI estimates current revenue rate at $8M annually.
  • Initial funding was less than $500K from private individuals, plus two founders put in their time gratis for a year; no venture funding.
  • All growth since then funded from operations.
  • Company started in 2003; offering launched in 2004.
  • Solid profitability; profitable since 2005.
  • No debt.
  • Calendar 2007 revenues were 40% greater than those of calendar 2006.
  • Calendar 2008 revenues projected to be 50% greater than those of calendar 2007.
  • 23 employees, all in the United States.

Challenges

  • Nothing comes to mind.
  • Company appears to have a secure future, assuming it continues to maintain its focus and excellence within its niche of large corporate email deliverability.

Miscellaneous Comments

  • Appears to be a very well-run company that has carved out a valuable niche.
  • Business has grown by word of mouth; investments in marketing have been minimal.
  • Company delivers a lot of value. Someone should buy them for a lot of money–the right buyer could justify $150M to $200M.

David Ferris

One Comment

  1. Ian Gilyeat
    Posted September 10, 2008 at 3:53 PM | Permalink

    Nice assessment of the operation, although I wouldn’t necessarily buy into the target price. It seems a bit rich to me, but hey, if somebody wants to pay them 20x revenue – bully for them.

  2. dferris
    Posted September 10, 2008 at 5:16 PM | Permalink

    Ian you’re right of course about the high multiple….I was thinking that someone could buy them as a strategic investment.

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