Investors keen to climb about the success of ecommerce unicorn Rokt have shelled out US$335 million (A$510m) to acquire existing shares as the business gears up for an IPO in 2026.
The sales values the privately owned New York-based Australian-founded scaleup at US$3.5 billion (A$5.6bn), up from $US2.4 billion (A$3.5bn) in late 2022 when $750 million worth of shares changed hands in a secondary market sale gave employees and early investors a chance to cash in on the platform’s remarkable success.
Once again local VC Square Peg was at the front of the queue for an extra slice of Rokt, buying in for a seventh time in 12 years. The fund previously owned 12% of the business, putting that holding at $672 million, an uplift of $252 million on its worth two years ago.
While buying back in, Square Peg also offloaded 30% of its 2012 fund holding and 20% of its 2016 fund stake to deliver liquidity to those investors.
Existing backer Tiger Global Management also took another bite, along with Barrenjoey and SecondQuarter. Rokt directors John Ho, Terry Bowen, and Karen Katz, are also buying in. The sales, by tender, came about following a unsolicited offer. This time staff cashed in around US$120 million (A$190m) worth of their chips. Employees have been granted around quarter of the company’s equity over its lifetime. The remainder of the sale came from early VC investors as those funds reached their maturity.
Rokt’s other investors include Boston-based Wellington Management, Whale Rock Capital Management, Pavilion Capital, super funds AustralianSuper and Hostplus, Moelis Australia, Lachlan Murdoch and Time Inc.
Rokt is now second only to Canva as Australia’s most valuable private company.
It last raised $458 million in a Series E three years ago. Other rounds include a $34.5 million in a series B in 2017, a $70 million in a Series C in 2019, and $112 million in a series D in October 2020 from existing investors that valued the venture at $630 million. Its first raise was an $8 million Series A in 2013.
Former Jetstar CEO Bruce Buchanan acquired the business in 2012 when it was the referral marketing company Rocklive, cofounded ex-Google executive Justin Viles and former Adconion director Ben Voltz, and rebranded it was Rokt, setting up shop in New York in 2014.
In a post announcing the deal, the company said revenue had grown tenfold in the last six years, including a 43% year-on-year increase in the past year to reach US$600 million. US-based investor and advisor Dr Anita Sands, a ServiceNow and Nubank director, has joined the Rokt board.
The business also recruited several senior execs in 2024.
M&A mode
Meanwhile, the business also shelled out US$300m (A$480m) to acquire real-time customer data platform mParticle. The deal comes 12 months after Rokt acquired Shopify partner Aftersell .
Buchanan said businesses using mParticle have achieved up to 50% better consumer and business outcomes
“This merger will enable us to bring significant performance lift to all of our clients,” the Rokt CEO said.
“We’re thrilled to join forces with the mParticle team to accelerate bringing our vision to life, enabling everyone to unlock the moments that matter most.”
mParticle CEO Michael Katz, who will remain in the role following the merger said the companies together “will offer the best of both worlds—a new class of solutions where customers can activate their data in real time to immediately impact business outcomes while maintaining complete ownership and control over their customer data assets”.
Culture questions
But it hasn’t all be smooth sailing for Rokt amid claims of a work hard play hard culture.
Buchanan says the company has matured and the party mindset no longer applies, but as a high-growth business, effort is core, comparing it to being a Navy SEAL for those up for the challenge.
Last year Buchanan was forced to play defence the federal government’s Workplace Gender Equality Agency (WGEA) report, revealed that Rokt had the biggest gender pay gap in Australian tech at 34.9% on base salary, and 52.4% after incentives.
Buchanan posted a response saying company’s median gender pay gap is actually 18% with just 22% of the total workforce in Australia, and the gap was “primarily driven by gender mix in engineering”. More than a third (35%) of Rokt’s global workforce is female.
“The comparison to other technology companies is not like for like as the Rokt office in Australia has more than 95% of people in Engineering,” he said last March.
And in 2023, Business Insider detailed a range of incidents at the business calling into question the company’s culture including a white Australian employee who dressed in ‘blackface’.
Insider reported that Buchanan”repeated what he’d told his staff in 2020: ‘There’s no African American population in Australia. It’s not like the US or South Africa or any of these places that have these racial tensions.’.”
There were also allegations against cofounder Justin Viles, and an unfair dismissal claim the company is defending. Buchanan and the business deny the allegations, with the CEO saying the long-running unfair dismissal claim, which saw him tell staff that the employee was dismissed for “repeated instances of theft”, was “meritless”.
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