Responsys is responsive to the changing needs of marketing programs. The company provides hosted marketing software and services to clients that use direct mail, e-mail, mobile devices, social media, the Web, and other marketing channels to reach their customer base. Its Interact Suite of software and related services helps clients assesses their potential customers and then plan and implement interactive marketing campaigns. Responsys serves customers from a variety of industries, and targets enterprise and larger mid-market companies. It has offices in Australia, Denmark, Germany, India, the UK, and the US. Customers have included Carlson Hotels Worldwide, Lands' End, and Petco. Responsys went public in 2011.
Spending on interactive marketing is expected to grow as marketers shift resources away from traditional media. The company capitalized on this trend through its public offering, which raised about $79.2 million. Responsys is using the proceeds for general corporate purposes, including working capital and future acquisitions.
The company's IPO comes on the heels of a successful 2010, when revenues and net income increased compared to the prior year. This earnings growth was the result of an increased number of enterprise customers and higher subscription fees. Positive revenues were offset by higher operating expenses due to a need to increase bandwidth and other resources to support a bigger business. In addition, its earnings in 2010 and 2009 reflect lower profits compared to 2008, when net income spiked as a result of a one-time tax benefit of some $20 million from the release of its valuation allowance.
Responsys has been focused on growing its geographic reach. Looking to expand in the Asia/Pacific market, in 2010 the company acquired a non-controlling, 50% stake in Eservices Group, an e-mail and cross-channel marketing services provider based in Australia. The move came about one year after Responsys launched its first office in that country. Eservices Group has since been renamed Eservices Responsys. Strengthening its presence in Europe, the company opened an office in Germany in 2011. The previous year it opened an office in India.
Pre-IPO, the company raised $62 million in venture capital funding since its founding in 1998, with investors such as Foundation Capital and Sigma Partners holding significant stakes. Board member Michael Schuh owns 17% through his position at Foundation Capital, while member Greg Gretsch owns 16% through his association with Sigma Partners. – less