After launching ExactTarget in early 2001, the founders went looking for their first customers – before they had a product. That audacious decision was just a prelude to an even bigger bet they made in 2009 when the Indianapolis-based marketing automation company was ripe for an IPO. The S-1 filing was done, and Wall Street was receptive. But ExactTarget didn’t bite.

Instead, CEO Scott Dorsey decided to double down: stay private and forward invest in the business through a series of investments. In the fall of 2009, Scott reached out to David Yuan, General Partner at TCV, for a meeting in San Francisco. The two had known each other since 2006. Dorsey’s pitch at the meeting: go for category leadership with a large investment from TCV, known for helping companies scale.

The timing was perfect. ExactTarget, which started out selling email marketing software to small and medium-sized businesses, was getting pulled into the enterprise space. This would require increased investment in R&D and sales force expansion – spending that could be hard for a newly-public company to justify to institutional investors.

TCV backed ExactTarget in seizing a much bigger opportunity. While the company’s competitors hunkered down in the aftermath of the 2008 recession, ExactTarget decided to forward invest in its people and technology to race past competitors and become the definitive market leader.

“Taking the investment and getting support from TCV was the best thing that could have happened because it allowed us to stay private and turbo-invest in the business at a critical moment. Wall Street likes to see increasing profitability after an IPO, and that would have been tremendously difficult to do while also investing in a big growth push.”

– Scott Dorsey, CEO of ExactTarget

In the year following TCV’s investment, ExactTarget introduced its groundbreaking Interactive Marketing Hub and a new software user interface. A new office in London opened up the European market. The acquisition of CoTweet fused social media into marketing automation. All these steps helped ExactTarget’s expanded sales force land big-name enterprise customers, and revenue subsequently climbed 40 percent.

The rapid growth continued over the next two years, as did international expansion, acquisitions, and product development. With that came an enhanced user experience for everyone on the receiving end of ExactTarget’s technology. Users began to see timelier as well as more useful and customized marketing messages, delivered to the online spaces they inhabited most often. With a big push from ExactTarget, the internet finally had a sophisticated marketing engine, with ExactTarget as a category leader in marketing technology.

By early 2012, ExactTarget became the largest SaaS company to go public. A year later it was valued at $2.5 billion via its acquisition by Salesforce and rebranded as the Salesforce Marketing Cloud.

“The ExactTarget deal represents one of the most important transactions in the history of the SaaS industry,” notes Yuan, who served on ExactTarget’s board of directors. “It also shows that great entrepreneurs can build market-leading companies anywhere, compete on the global stage, and wind up changing entire industries.”


If you want hear more about how ExactTarget scaled past $100 million in revenue, listen to our podcast with Scott Dorsey and David Yuan.