Customer engagement software company Braze Inc. enjoyed a strong debut on the public markets today with its share price opening 34% above its marketed range to value the company at almost $8 billion.

Braze said it sold 8 million shares in its initial public offering along with certain selling stockholders, raising $520 million in the process. Prior to the IPO, Braze last raised money three years ago when it closed on an $80 million Series E funding round at a valuation of $850 million.

Braze has created a popular customer engagement platform enterprises can use to gain a better understanding of consumer behavior. With it, companies can ingest and process customer data in real time, then orchestrate and optimize contextually relevant, cross-channel marketing campaigns based on the insights they derive from customers’ behavior. Braze competes in a tough market alongside heavyweights such as Salesforce.com Inc. and Adobe Inc., plus numerous smaller players such as Freshworks Inc., which went public itself in September.

It may be a competitive market segment, but Braze has carved out a niche for itself. It boasts a diverse range of big name customers including IBM Corp., Grubhub Inc., Venmo, a peer-to-peer payment service owned by PayPal Holdings Inc., Delivery Hero SE and Credit Sesame Inc. All in all, Braze counts 1,119 paying customers across the world, according to its IPO filing, up from 890 at the end of January.

That said, Braze is not yet running at a profit. The company reported a net loss of $26 million on $104 million in sales for the first six months of the year. A year prior, it reported a net loss of $12 million on sales of $68 million.

But investors are betting on what they believe is a big opportunity for Braze to capitalize on accelerated digital transformation in numerous industries. In a letter to investors, Braze co-founder and Chief Executive William Magnuson said the company is especially focused on the importance of using mobile technology to connect customers to brands.

“We will continue to expand the company to take advantage of the huge addressable market, and the scrutiny of the public market is something that has been a kind of focusing point for the company for quite a while,” he added.

Braze’s strong showing today is the latest in a string of impressive market debuts for software and technology companies riding on a wave of pandemic-driven digital transformation.

Braze’s biggest investors prior to the IPO were Battery Ventures and Iconiq Capital. Affiliates of InterWest Partners and Bullpen Capital had planned to sell a combined total of 1.3 million shares in the IPO.

Goldman Sachs & Co, J.P. Morgan and Barclays were the lead underwriters for the offering.

Photo: Braze