Our investment in Grow: Behavioral health’s independent practice platform

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The mental healthcare industry in the U.S. is at an inflection point: Patients can’t easily find help while therapists are overworked, underpaid, and frustrated with traditional employment options. Therapists are increasingly dissatisfied with the groups they are employed by and 80% are looking for a new way to engage with patients.

Launching one’s own practice is hard. Self-employed therapists must navigate complex payer relationships to offer in-network coverage, tap channel and referral networks to build their book of patients, manage burdensome administrative work, and cultivate a network of peers for collaboration and support. The industry’s antiquated practices are directly impacting patient outcomes and clinical quality.

Grow’s B2B2C platform enables therapists to launch their own independent practice and in doing so, enables therapists to expand access and better serve patients.

With Grow’s complete ‘practice-in-a-box’ solution, self-employed therapists can offer affordable insurance-covered care to patients without having to worry about patient acquisition, overhead, or other administrative burdens that often fall on independent private operators (e.g. EHR, scheduling, invoicing, payment collection, note taking tools). Grow also provides a community for therapists to engage and connect with other providers in the field. 70%+ of providers use the Grow Community weekly and many cite this feature as a reason for their success on Grow. 

For patients, Grow offers a convenient path to find the right in-network behavioral health provider, book time instantly on their calendar, and access confidential secure care either virtually or in-person. 

Team on a mission.

The idea for Grow came from CEO and Co-Founder Jake Cooper’s experience with the difficulties of finding in-network behavioral care. After many dead-ends, Jake decided to pay out-of-pocket for a provider not covered by his insurance. While he had the resources to tap a provider out-of-network, Jake knew most Americans did not.   

Jake partnered with co-founders Alan Ni and Manoj Kanagaraj, as well as a broader team with deep experience across technology, healthcare, and payments, to build a mission driven company which empowers therapists to launch their own independent practices that are: 1) covered by the largest number of insurance providers in the industry, 2) easily discoverable by patients, and 3) scalable due to full-stack supporting infrastructure. 

Our partnership with Grow.

We’re thrilled to announce that TCV has led Grow’s Series B. In this round, Grow has raised $75M in equity and debt capital from TCV and other leading investors including Signalfire and Transformation Capital.

At TCV, we look to partner with founders who are building category-defining, generational companies and we’re incredibly excited to partner with Jake, Alan, Manoj, and the rest of the Grow team on their mission to create the largest and most accessible behavioral health platform in the country. 

Making Work Better: Humu Applies Behavioral Science and AI to Optimize Employee and Enterprise Performance

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As the world shifts towards a knowledge economy, enterprises need to re-imagine how they do business. They are realizing that their employees are their most important asset and are searching for a smarter way to engage, encourage, and drive the best performance. Enter Humu, a platform working at the intersection of behavioral science and AI to solve that very issue.

Humu, a recent addition to the TCV portfolio, is rapidly gaining adoption from some of the world’s largest and most complex organizations. Its intelligent technology platform coaches managers and employees into developing work habits that are scientifically proven to drive performance. Humu was co-founded by CEO Laszlo Bock, former Google SVP of People Operations, and is the output of decades of his work and experience in helping make HR a more data-driven function. Laszlo is uniquely positioned to build the Humu technology platform into a must-have for organizations looking to drive employee engagement, optimize performance, and improve productivity.

Specifically, by nudging employees with short, behavioral science-backed recommendations, Humu provides personalized guidance that’s unique to each employee, helping workers to build better habits, while also driving towards organizational goals, including employee retention, manager effectiveness, productivity, and inclusive cultures.

TCV is thrilled to lead Humu’s $60 million Series C. The investment, which follows two years of significant growth for the Company, will fuel new product innovations geared to support managers and their teams. TCV venture partner Jessica Neal, former Chief Talent Officer at Netflix, has joined Humu’s Board of Directors as part of our new partnership.

TCV’s experience in seeing the magic in the Right Content, Right Person, Right Time

TCV has long understood the value of delivering engaging, timely content to the right person at the right time and has invested based on this thesis for over two decades, including in companies like Netflix (video), Spotify (music), Peloton (fitness), and Newsela (K-12 instructional content).

TCV believes that timely content curation and delivery should extend from our consumer lives to our work lives: if Netflix can feed us more of what we need to keep us entertained, why wouldn’t we benefit from similar capabilities in the workplace? Businesses need a system that serves us the right content at the right time to help us perform better.

What is exciting about Humu? Humu is driving real outcomes

Humu’s AI-based Nudge Engine™ technology drives timely “nudges” to encourage employees to do more of what creates optimal outcomes and experiences for employees and enterprises. Nudges are delivered in curated pathways that are algorithmically generated, sequenced, and tailored to a particular initiative and employee.

At a glance:

  • Every Humu nudge is based on academic research and carefully crafted by Humu “people analytics” experts
  • User experience panels ensure nudges are easy to understand and act on. Feedback loops make it possible to turn off what’s not working, and send more of what is
  • Employees turn to nudges more and more over time. Sustained nudge engagement rates across customers are as high as 95%

At Silicon Valley Bank, Humu’s nudges focus managers and employees on what matters most – and remind them at just the right moments to adjust their habits. That could be in supporting managers who may be too focused on execution at the cost of supporting employee development and encouraging them to find ways to offer their people personalized growth opportunities. Don’t take our word for it…hear it directly from Humu’s customer SVB:

“People don’t have to wait for management to roll out a time-intensive program. Humu provides our employees with relevant, customized feedback that’s not generic or mundane. Nudges democratize the employee engagement process; they make learning much timelier and easier for everyone involved. We have a 70% open rate, which means it’s going really well. The right nudge at the right time really makes all the difference.”

Chris Edmonds-Waters, Chief Human Resources Officer at Silicon Valley Bank

A team that helped build a trillion-dollar business, and is now on a mission to solve work for everyone

Humu’s CEO Laszlo Bock helped build and lead Google’s people function for ten years, a role in which he was responsible for attracting, developing, retaining, and delighting ‘Googlers’ (he distilled a lot of his practices and insights into his book published in 2015, Work Rules!: Insights from Inside Google That Will Transform How You Live and Lead).

He co-founded Humu in 2017 with former Google colleagues Wayne Crosby (former Director of Engineering) and Dr. Jessie Wisdom (former People Analytics Manager). Together, this formidable team founded Humu “to make work better through machine learning, science, and a little bit of love” – not to mention everything they had learned about smart use of data.

“When we began this journey in 2017, we knew our experience in pioneering the field of people analytics would help us build what we believe is the best technology for supporting managers and employees, and we’re proud of the impact we’ve made.

This latest investment, led by TCV, signals our partners’ confidence in our ability to deliver on that promise long into the future, and we’re excited for what we’ll bring to the market, especially for managers, in the months to come.”

Laszlo Bock, CEO of Humu

TCV is excited to be a partner in building a category leader

TCV believes Humu represents an opportunity to back an emerging leader in the HR technology sector, led by a world-class team that’s uniquely positioned to penetrate a massive market with compelling industry growth tailwinds. With this latest round of funding, Humu aims to take steps towards executing its bold vision of facilitating building a unique, high-performing culture for its client organizations based on proven best practices. As a firm that focuses on long-term value creation, TCV believes that Humu, with its deep background in people analytics, has the potential to make a positive impact on the way we all work.

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The views and opinions expressed are those of the speakers and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any statements by the speakers and disclaims any responsibility therefor. This post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified, if any, are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/. For additional important disclaimers regarding this interview and blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.

Instant Global Identity Verification: How Trulioo’s Technology and Data Marketplace is Transforming Digital Customer Onboarding

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Digital innovation has transformed how consumers and businesses access a range of online services – from streaming media, booking travel, setting up bank accounts, or financing a car. As more and more high-value services are performed through digital channels, it is increasingly important for businesses to know who is using their platforms. Many fintech applications need identity verification to comply with ‘Know Your Customer’ (KYC) regulations, while online marketplaces need it to maintain trust and safety on their platforms. These requirements have created a huge market opportunity for identity verification technology – a market TCV has been tracking for several years, looking for the right opportunity.

We found such an opportunity and are thrilled to announce our investment in Trulioo, the market leader in global consumer and business identity verification technology. Through its network of 450+ data partners, Trulioo can verify identities across over 5 billion individuals and 330 million businesses in more than 195 countries and territories. That’s the broadest reach of any vendor in its industry – and it’s all delivered via a single API.

For Trulioo’s customers, the opportunity is to maximize the number of clients they onboard globally via a frictionless experience, while seeking to ensure regulatory compliance and preventing fraud. We believe, this compelling value proposition has created significant momentum in Trulioo’s business – revenue has more than doubled over the past year, and growth is accelerating.

And while Trulioo has built a market-leading identity technology business, its ambition is to become the first global end-to-end identity verification platform by introducing AI/ML functionality and additional software applications. We are confident that our investment and partnership will help Trulioo accelerate its growth and achieve its platform vision even sooner.

Identity Verification Data with a Difference

Trulioo commands a leading position in its field, providing an API-driven marketplace of rich identity data. This is triangulated across multiple sources, normalized, and then delivered to customers via a single, modern API. Customers embed Trulioo’s API into their onboarding and compliance platforms to perform KYC/KYB (Know Your Business) verifications. The API and data-centric approach renders accurate identity verification quickly and enables a frictionless customer onboarding experience.

Trulioo’s identity data marketplace is built from a rich network of relationships with over 450 country-specific data providers that the company has developed over more than a decade. This adds up to a compelling value proposition for companies with global growth ambitions and has established Trulioo as the market standard for international identity verification. As Trulioo grows its customers and data sources, it creates a virtuous cycle that makes its value proposition more attractive to both sides of the marketplace. Finally, Trulioo has built a rich set of value-added features, rendering it well positioned to become an end-to-end identity technology platform.

This powerful data-driven proposition quickly drew our attention, and the people who are working to build Trulioo into a franchise technology leader are just as impressive. Founded in Vancouver, Canada a decade ago, the business is led by Steve Munford, a veteran software industry CEO, who TCV has known for more than a decade. Previously, Steve has scaled multiple highly successful companies including Carbonite, Absolute Software, and Sophos.

Steve joined Trulioo in 2020 and is surrounded by a world-class team including COO Zac Cohen (formerly Strategy & Operations at Global Relay), CTO Hal Lonas (former CTO of TCV-backed Webroot); CFO Leigh Ramsden (formerly CFO at Absolute Software); CRO Matt Schatz (former SVP of Sales at WP Engine); along with 240+ talented team members. That’s quite a line-up, and we’re delighted to work with everyone there to help Trulioo execute its growth strategy.

Glowing References from all Angles

Our conversations with Trulioo have been exciting from day one. It was immediately obvious that we share a belief in the vast market potential for identity verification, in addition to our conviction that the winning technology will increasingly need to be global, creating a unique opportunity for Trulioo to be the end-to-end platform of choice.

We first met Trulioo’s team in 2015 and heard rave reviews about the product from customers within TCV’s portfolio. When Steve joined Trulioo in 2020, we increased our dialogue with the team – holding multiple meetings where we discussed the company’s growth strategy and Steve’s vision for the business.

On top of our portfolio references, we conducted calls with many of Trulioo’s customers, partners, and identity market observers. The market feedback was effusive about the company’s value proposition, with customers seeing its product as clearly differentiated from other vendors thanks to its 360-degree data-driven approach.

A Shared Belief in the Global Identity Verification Opportunity

TCV has already invested extensively in the companies and industries that Trulioo serves which has fueled our excitement and conviction in the company’s value proposition. We believe that fintech companies – including payments and remittance companies, challenger banks, and trading platforms – will continue to grow globally. It’s why we’ve backed leaders – including Payoneer, WorldRemit, Nubank, Revolut and Wealthsimple – that are embarking on global growth agendas.

Given the importance of API-driven identity verification for digital KYC and other related applications, we believe Trulioo will be a valuable partner as fintech vendors grow. And, as many companies across verticals embed fintech capabilities into their products, we think Trulioo’s offering will resonate with an even broader market.

We’ve also seen firsthand how critical it is to maintain trust and safety for online marketplaces, through having Airbnb, Nerdy, and Rover in our portfolio. Similarly, we’ve witnessed many other industries, including e-commerce and gaming, investing increasingly in identity verification technologies, using trusted third-party sources, as they pursue global growth agendas.

Drawing on experiences from our portfolio companies, we also have high conviction in the rising importance of governance, risk, and compliance (GRC) technology, and have backed leaders including AxiomSL, OneTrust, ETQ, and Watermark in this space. As a critical aspect of their GRC strategies, we think identity verification – and Trulioo in particular – will grow in importance as global digital onboarding continues to expand.

A Powerful Partnership to Build on

We’re delighted at this meeting of minds and ambitions in a vast, emerging industry with powerful tailwinds. Trulioo is addressing a huge problem that applies to many of the most innovative, fastest growing verticals, and we are excited to help them seek to revolutionize their industry.

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The views and opinions expressed are those of the author and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any of the data or statements by the author and disclaims any responsibility therefor. This blog post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified above are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/. For additional important disclaimers regarding this interview and blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.

FarEye Helps Enterprises Delight Their Consumers at Every Step of the Journey

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After perusing slick digital shopfronts for hours, checking AI-enabled online catalogs, and paying through seamless single-click checkouts, you may eventually be rewarded with ‘your delivery should arrive in 5-10 working days’ and left to pray that the shiny new gizmo you ordered will arrive in one piece. Sound familiar? For all the innovation and investment across most steps of the online purchasing journey, the actual delivery experience has been largely neglected. Yet, the surge in remote purchasing shows no signs of abating and consumers are demanding faster, better, and cheaper deliveries. This has placed the status quo under immense strain and the need for new solutions to help companies navigate this complexity today is greater than ever.

A New Frontier for Innovation in E-Commerce Enablement

E-commerce enablement has been a key investment theme for TCV, and we have made multiple investments across each step of the value chain. In early 2019, we invested in RELEX Solutions (Helsinki, Finland) which provides an AI-driven platform helping global retailers forecast demand and prepare their supply chain to execute against it. In 2020, we backed Spryker (Berlin, Germany) which helps enterprises build beautiful digital commerce platforms for B2B, B2C, and marketplaces. We also invested in Mollie (Amsterdam, Netherlands) which provides a seamless, easy-to-integrate online payments solution for merchants across Europe. Another recent investment is Trulioo (Vancouver, Canada) which provides seamless know-your-customer (KYC), and know-your-business (KYB) verification checks globally, enabling smooth onboarding of merchants and consumers onto online marketplaces and fintech platforms. Paradoxically, while the e-commerce experience may appear increasingly effortless for consumers, the underlying technology landscape has become increasingly sophisticated and complex.

Following our investments upstream in the ecommerce value chain, we cast our eye further down, identifying logistics as the natural next step. Within this untapped, vast market, last-mile delivery from a fulfilment center to a delivery endpoint like a consumer home has always been the most operationally complex and resource-intensive leg of the journey, absorbing nearly 50% of total logistics dollars spend, driven by inherent lack of economies of scale (disparate drop-off points) and its on-demand nature. Complexity has also compounded due to new delivery and fulfilment modes like micro-fulfilment centers, curb-side pick-up, etc. which strain already razor-thin margins for retailers and carriers alike. Even Amazon, the most sophisticated logistics machine in the world, has not been spared — as a percentage of retail-related sales, Amazon’s cost of fulfilment/shipping grew from ~16% to 32% between 2010-19. On the end-consumer front, delivery experiences have become a critical driver of satisfaction and repeat purchases, with delivery constituting the only physical touchpoint for online brands with their customers. In fact, 55% of US consumers have bought goods from one retailer over another because they provided more delivery options[1]. Throw all of the above in the mix and you have a market that is ripe for disruption. Enter FarEye – a next-generation intelligent software platform that helps enterprises to orchestrate all of their delivery logistics requirements.

We were thrilled to recently announce our investment in FarEye. Founded in India in 2009 by Kushal Nahata (CEO), Gautam Kumar (COO), and Gaurav Srivastava (CTO), the trio started their journey as logistics consultants, before settling on their strategy of building a software platform that would help companies navigate the immense complexities of managing last-mile deliveries. Having spent several years developing the product in India and South-East Asia, where delivery logistics challenges are even more pronounced than in Western economies, FarEye relocated headquarters to Chicago and moved towards global expansion, addressing the vast demand across Europe and the U.S.

Compelling ROI and an Enormous Market Opportunity

We first came to know FarEye through its superlative customer feedback and enormous ROI generated for customers – 22% improvement in first-attempt deliveries, two times improvement in courier satisfaction, and 24% increase in on-time deliveries all while providing complete visibility across the entire logistics operations. Spurred by these reviews, we got in touch with Kushal and were blown away by the depth of the platform as well as Kushal’s strategic and product vision.

The FarEye platform provides an incredible range of end-to-end functionality today — all deployed on fully multi-tenant, cloud-native infrastructure — that benefits retailers, carriers, manufacturers, and end consumers alike. Shippers and carriers benefit from automated order allocation and dispatching, real-time dynamic routing, loop optimization and electronic proof of delivery; their customers get slot-based & flexible delivery scheduling, automated alerts and notifications, the ability to real-time track their deliveries, and 24/7 chatbot-based customer support. FarEye also empowers enterprises with the latest advances in real-time tracking and tracing, ETA prediction based on real-time constraints such as traffic bottlenecks, and control-tower visibility of enterprise delivery activity.

At the heart of the FarEye platform is a low-code BPM engine that allows users to rapidly build delivery workflows that can be customized to meet the demands of a particular industry and customer. Customers today span hot-food delivery, pharmaceutical, packaged goods, housewares, industrial equipment, and more. FarEye even counts some of the largest global carriers among its clients. FarEye Delight has helped the company to quickly expand its existing customer base which increasingly rolls out the platform across new geographies and business units while growing its functionality with net retention that is best-in-class.

As e-commerce and broader home-delivery become the new normal, retailers across the world are racing to adapt, while those that do not face the risk of quickly falling behind. For TCV, FarEye is an excellent fit with our overarching strategy of investing early in what we believe to be the franchise technology companies of the future – no matter where they are founded. FarEye joins Cognite, Trulioo, Redis Labs, Revolut, Relex, Nubank, Klarna, Mambu, Mollie, Spryker, and Dream Sports among recent investments made outside the U.S. Based on our experience investing in many other global leaders that were once young growth-stage companies, we believe FarEye has the technology, talent, expertise, and strong track record to become a truly generational software business of the future.

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The views and opinions expressed are those of the author and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any of the data or statements by the author and disclaims any responsibility therefor. This blog post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified above are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/. For additional important disclaimers regarding this interview and blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.

[1] MetaPack Global eCommerce Consumer Report, 2020

From Siloed to Contextualized Operational Data – How Cognite is Driving the Digital Transformation of the World’s Largest and Most Vital Industries

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Everyone talks about the transformative power of big data, often in relation to consumer insights. Yet there is a river of information flowing just as powerfully out of industrial facilities around the world – information that could be harnessed to make our planet more sustainable, industries more efficient, and jobs safer.

Industrial companies are waking up to the power of that information, and today we’re excited to announce an investment in Cognite, a global industrial Software-as-a-Service (SaaS) leader, whose mission is to digitalize heavy-asset industries and unlock the power of their operational data.

The Industrial Leaders’ Choice

Founded in Norway in 2017 by Dr. John Markus Lervik, Geir Engdahl, and Stein Danielsen, Cognite has made huge headway in transforming the use of data across oil and gas, power and utilities, renewable energy and manufacturing, using its cloud-based Cognite Data Fusion (CDF) platform. Companies like bp, Saudi Aramco, Alfa Laval, Statnett, and Mitsubishi are already optimizing the way they operate using Cognite’s platform.

In Good Company

Cognite is an exciting addition to TCV’s portfolio and fits squarely with our thesis on the next-gen industrial software space. This dates back to our support for Seismic-Micro Technology (SMT) from 2007, which gave us early insight into how oil and gas companies value operational intelligence – and its importance from a regulatory and operational efficiency perspective.

This investment led to us finding and backing OSIsoft in 2011, which has since become a standard in the Industrial Internet of Things (IIoT) market due to its ability to pull data from sensors and industrial equipment at scale for the world’s largest industrial companies.

Another investment is IQMS, one of the first manufacturing software vendors to natively connect manufacturing execution systems to the ERP software of their suppliers/smaller manufacturers, so they could harness the power of the factory data to hone business decisions.

Across these investments we have seen big data and data-driven decision-making soar and drive a huge opportunity for innovation and investment.

Bridging the Gap Between Business and Operational Data Insights

Digital-first companies inherently operate in a data driven way. They produce a sea of business performance data via their IT systems and are able to collect, analyze and manage that data to plan more strategically and run more efficiently. The opportunity in the industrial space is to extend these benefits, harnessing the oceans of operational technology (OT) data generated by every asset and piece of equipment making up factories, processing plants, or broader industrial estates. To date, turning this data into business value has proved a challenge – not least because OT covers a diverse range of data sources and formats.

The sensors on a single piece of equipment may hold the key to insights about production quantities, efficiency data, motor speeds and heat readings. The challenge is how to combine all those different data points into the right context to assess and improve equipment performance. This is a problem that, until recently, no one had solved – and, frankly, few companies even understood.

A Meeting of Minds and the Missing Contextualization Layer

In 2018, not long after Cognite’s founding, Øyvind Eriksen, President & CEO of Aker, and Kjell Inge Røkke, the majority owner of Aker, came to visit our California offices along with Cognite’s CEO, John Markus – to discuss what they were building at Cognite.

It was clear to us from that first meeting that Aker’s support and industrial expertise, combined with John Markus’ product brilliance, addressed the need for this missing contextualization layer – and that Cognite’s product strategy would be aimed at solving this critical issue. That initial meeting led to a relationship which has culminated in TCV’s investment today.

Cognite uses the latest technology – in particular machine learning – to enable large amounts of information to be ingested in real time and, crucially, contextualized so it can be leveraged for a wide range of use cases. This approach, which improves data’s accessibility and governance across an entire organization, significantly shortens the time to value and scalability of high-ROI applications including predictive maintenance, production optimization, and remote work.   

Fueling Cognite’s Next Growth Chapter

Cognite is the perfect fit for TCV’s strategy of investing early in potential franchise companies of the future. We are thrilled to be part of their next growth chapter and help them scale and catalyze the full-scale digital transformation of heavy-asset industries.

The company joins Brex, Redis Labs, Revolut, Relex, Klarna, Mambu, Mollie and recent investments in Europe and around the world. Like OSIsoft, IQMS, Genesys, Netflix, Spotify and many other global leaders in our portfolio that were once young growth-stage companies, Cognite is forging ahead in a fragmented field to become the category leader.

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The views and opinions expressed are those of the author and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any statements by the author and disclaims any responsibility therefor. This blog post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified above are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/. For additional important disclaimers regarding this interview and blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.

AxiomSL: A Fintech Franchise Takes Off

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The financial crisis of 2008 came as a resounding shock for countless companies, including many in the financial industry itself. But not for AxiomSL, a leading provider of cloud-enabled software for governance, risk, and compliance (GRC) regulatory reporting solutions to the financial services industry.

AxiomSL was founded by Alex Tsigutkin and Vladimir Etkin in 1991. As data management experts they had seen disorganized, unintegrated GRC processes even in highly regarded financial firms. “Everywhere I went, it was the same. The data was all over the place, in different systems and different departments,” explains Tsigutkin, CEO of AxiomSL. “We saw a real need to bring all of this enterprise data together at a granular level.”  Large financial institutions soon began adopting AxiomSL’s software to assemble data they used for assessing risks and reporting financial results to investors and regulators.

Then the repeal of the Glass-Steagall Banking Act in 1999 freed financial institutions to diversify into a wide range of new activities, and GRC processes took a back seat comparatively. The new priority was financial innovation and growth, to extend the United States’ position of prominence in global finance. “For years, the government and regulators didn’t put that much pressure on financial institutions,” Tsigutkin points out. “That changed completely after the 2008 financial crisis, and that’s when AxiomSL really took off.”

By this time, the company’s software data management platform and related algorithms organized operating data to align with the latest requirements of various regulatory authorities in multiple countries globally. These category-leading capabilities spurred AxiomSL’s sales growth into double-digit territory. International business began climbing too. “We were growing like wheat in the fields,” says Tsigutkin, a native of Ukraine.

But growth also brought some challenges. AxiomSL had always given its customers attentive support, especially when they were new to automating GRC processes. With rapid growth, that level of care was becoming harder to sustain; a successful strategy for landing and expanding clients was reaching its limits. “It’s very difficult to do everything on your own, especially dealing with a large and growing client base at the same time,” Tsigutkin says. “I felt this was a great opportunity to put some expert disciplines together. When I got advice on how to do that, it was to bring top notch growth equity into the mix.”

So Tsigutkin invited growth-stage investors to present their ideas for AxiomSL, including TCV, a firm he knew well from regular interactions in the past. With around $2 billion already invested in fintech, TCV understood that AxiomSL’s business could grow even faster for three interrelated reasons: an explosion of data in the financial world, proliferating regulations around the globe, and sharply higher consequences for financial companies that mismanaged them. With tighter financial discipline, more proactive sales efforts and scaling up systems and processes, AxiomSL believed it could become not just a category leader but the global standard for risk management and regulatory infrastructure solutions for the financial services industry.

“As we talked with private equity firms, TCV was distinctive in a number of aspects,” recalls Etkin, the company’s CTO. “They had proven success with fintech and GRC companies, so their long-term vision for AxiomSL and their approach to collaborative business-building really stood out.”

TCV invested in AxiomSL in June of 2017, and the new partnership moved fast. “TCV knows how to focus on what’s key for scaling a company, not just growing in the same way,” Tsigutkin explains. For example, TCV pinpointed the need for industrializing sales, sales leadership as well as more robust processes for planning and budgeting. “They also helped us understand how to use equity to attract and reward people,” Etkin notes, which enabled the company to recruit multiple new executives with significant experience scaling similar organizations.

“TCV saw in AxiomSL a category leading industry-specific software business with next generation technology, a highly satisfied client base, a mission-critical use case, – and most importantly, product-centric co-founders and partners in Alex and Vlad who had deep subject matter expertise and a strong growth orientation.” recalled Nari Ansari, TCV general partner and former board director at AxiomSL.

The collaborative approach between AxiomSL management and TCV helped AxiomSL accelerate growth, increasing software revenue over 150% in three years. Its ControllerView® intelligent data management and analytics platform could provide thousands of reports across dozens of jurisdictions and more than 100 regulatory agencies. From 60 employees during the financial crisis, the company had grown to nearly 900 globally. According to Tsigutkin, “having such a strong team really helped us to build a world-class organization.”

Consistent with TCV’s longstanding investment thesis for governance risk and compliance solutions, change and complexity can provide for significant opportunities for leading software vendors.  Indeed, AxiomSL’s positioning for its offering set has been as a “Platform for Change” given the constantly evolving regulatory environment for financial services market participants.  As the business entered 2020, that change orientation would become even more paramount.

“As COVID-19 started in early 2020, the world changed quickly, and the swiftness of market happenings was adding increased complexity for banks and regulators alike. During this period, AxiomSL’s value proposition in understanding and managing risk continued to demonstrate its importance and the business saw sustained momentum throughout 2020,” remarked Amol Helekar, a TCV principal. 

When the pandemic hit, AxiomSL as an organization had to adapt as quickly as its customers. “Being with TCV during this period was absolutely a blessing,” Tsigutkin recalls. “First they helped us to stay calm and provided very sound advice about our talent strategy and the welfare of our valued Axiom team members. Then they helped us focus on execution and growth. Moving more into digital marketing, for example, really enabled us to keep growing in 2020.  TCV also supported us as we increased our investment in cloud offerings which became even more important in a distributed COVID world for our bank clients.”

AxiomSL’s hyper-growth during the TCV partnership resulted in consistent market share gains. Along with the company’s strong profitability, blue chip client list and technology leadership, these attributes brought interest from outside parties, particularly private equity firms. As Rick Kimball, TCV founding general partner and former AxiomSL board director remarked, “Alex, Vlad, and the team transformed the organization during our partnership while deftly executing a growth agenda that expanded the business on multiple dimensions.”

In the fall of 2020, TCV worked collaboratively with Alex, Vlad, and the AxiomSL management team to assess this external investment interest and prepare the business to explore various alternatives. Ultimately this brought an offer from private equity firm Thoma Bravo to acquire a majority stake in the company.  The new investment closed in December of 2020 in one of the largest GRC transactions of its kind, and Tsigutkin took a moment to reflect, “Our growth is due in no small part to the contributions of TCV, who has been a critical partner for AxiomSL for the past three years as we grew the franchise at a record pace.”

Tastytrade interview with Chuck Davis of Prodege | Bootstrapping in America

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From starting a football newsletter as a teenager that led to an internship with the NFL, to pioneering e-commerce at The Walt Disney Company and leading Fandango and Shopzilla.com as CEO, Chuck Davis has great stories and valuable lessons to share.

Chuck Davis is the CEO & Chairman of Prodege, an internet and media company that is dedicated to “creating rewarding moments” for its members by rewarding them with more than $700 million in cash and free gift cards since inception.

Prodege is the parent company of consumer rewards platform Swagbucks and InboxDollars and cash-back shopping sites MyPoints and ShopAtHome which has awarded over $700 million to its members.

Hear more about Chuck’s journey on this video interview for tastytrade‘s “Bootstrapping in America” episode, hosted by Tom Sosnoff & Tony Battista.

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Chuck Davis is a Venture Partner at TCV. Prodege and tastytrade are TCV portfolio companies. Fandango was a TCV portfolio company.

The views and opinions expressed in the blog post above are that of the author and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). This blog post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified above, if any, are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/. For additional important disclaimers regarding this document, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.


Factory Software from Wine Country

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It began over dinner. Nancy and Randy Flamm, who worked for competing suppliers of materials to small manufacturing companies, were out with a shared customer who wished that his factory had the kind of MRP and ERP software that large manufacturers had. Randy sensed opportunity: As production manager at a small manufacturer in the early 1980s, he had written his own software for inventory and scheduling. In short order the Flamms quit their jobs, took a second mortgage on their house in Los Angeles, and launched IQMS.

They had 100 customers within a year.

The innovations came quickly. Randy converted his software to the newly introduced Windows platform, creating one of the first Oracle-based client-server programs for small manufacturers. Then he connected the application to factory equipment so that the machines automatically sent operating information to a data warehouse. Next, he linked the warehouse to back-office financial and human resource systems for the industry’s first end-to-end solution. He changed the whole game by delivering comprehensive views of factory performance in real time.

Now IQMS enabled small factories to do what the big ones did: monitor operations moment by moment around the clock, adopt lean principles, organize just-in-time supply chains, cut downtime with proactive maintenance, and determine production cycles and unit costs within minutes and cents.

Growth and Challenges

With growth came both challenges and opportunities. The Flamms had moved IQMS to Paso Robles, a wine region midway between Los Angeles and San Francisco, which made them one of the handful of high-tech companies near mid-state universities such as California Polytechnic University (“Cal Poly”). But then Silicon Valley began attracting talent from those schools, and the Flamms had to get creative with their recruiting. One tactic was doing interviews on local talk radio, encouraging parents and grandparents to tell college-age kids that Paso Robles had its own high-tech employer.

Meanwhile Randy was the company’s CEO, CTO, and software designer, and nearly everybody in the company reported to him. Nancy, the controller, pulled in her brother and his wife to run sales and marketing. When the Flamm’s babysitter Shannon Holloway showed interest in IQMS, they discovered she had management talent and hired her, too.

At the 20-year mark, IQMS had annual revenue of $35 million, no debt, a strong competitive position – and the Flamms were turning down dozens of investor inquiries each year. When they decided to recapitalize in 2014, one company stood out. “TCV was heads above everybody else,” Randy Flamm says. “We spoke the same language, and everything they ever said was exactly what happened.”

Strong Partnership

“IQMS caught our attention well before we invested, because of our experience with other founders who achieved the same kind of technological and competitive breakthrough,” explains Jake Reynolds, general partner at TCV who led the investment with fellow general partner Kapil Venkatachalam. “We weren’t worried that they had taken little or no outside investment, because that meant they were going to judge us based on what we could do for their business, not the size of our check.”

TCV presented a roadmap for moving IQMS toward cloud-based, SaaS solutions that generated revenue from subscriptions rather than licenses. TCV also advocated for tools to surround the company’s customer-focused products with stronger support and professional services, and for increasing speed by building out the software architecture to a true multi-tenant solution. Significant investments in all these areas would take several years to accomplish but prove decisive for scaling the company.

Just as importantly, TCV had abundant experience with transitioning founder-led, family-run companies to experienced manage teams. That’s why everyone was delighted when Gary Nemmers, formerly COO of HighJump Software, agreed to become IQMS’ new CEO in 2015. Nemmers was a veteran of other founder-led businesses, and he had helped grow and scale multiple businesses and prepare companies like HighJump for its successful exit via acquisition. “The first time I met Randy and Nancy, we clicked, and I knew it in my gut that the time of the transition was right,” Nemmers recalls, and that was the beginning of IQMS’ next phase of rapid and sustainable growth.

Smooth Management Transition

Respectful of IQMS’s close-knit culture, Nemmers worked closely with TCV and brought in seasoned veterans to take leadership positions the company had never staffed before, including Matt Ouska as CFO, Dan Radunz as CTO, and Cheri Williams as SVP of professional services. Under Nemmers’ leadership, the team formalized and aligned the company’s core business processes so they could accelerate product management and development, serve more customers, and scale more efficiently than in the past. They also established an office near San Francisco to increase the company’s accessible pool of software talent.

“Our mantra was ‘people, processes, playbook’,” says Nemmers of his first year leading IQMS. “Once we added a few key people, we could bring in strong processes across the entire firm and establish playbooks to do things in a consistent, repeatable way.” As for working with private equity, his advice to other CEOs is equally clear. “You listen to and align with your board and your investors. At the same time, you follow what has made you successful in the past because that’s why they hired you to run the company.”

New Growth

IQMS flourished and significantly increased its customer base. Growth was not always smooth, but TCV had Nemmers’ back. “License revenue is inherently lumpy,” he points out, “so sometimes revenue was a rollercoaster. We’d crush our plan one quarter and miss the next, but we had a plan and knew how to execute. The board was super helpful in thinking long-term and strategically versus focusing on quarter-to-quarter swings. They were great sounding boards.”

With a broader and deeper solution set plugged into a professional marketing engine, IQMS emerged as one of the top software providers for small and medium-sized manufacturers around the world. The company naturally started attracting attention from the strategic players in the ecosystem. “We knew that IQMS offered the best route for enterprise software providers who wanted to expand into the SMB space,” Nemmers points out, “so we played from strength. It wasn’t just the enterprise players evaluating IQMS, it was also us looking for an ideal fit.”

Strategic Exit

Dassault Systèmes of France stood out for exactly that reason, and Nemmers seized an opportunity to kickstart the conversation. During a visit to Europe, he picked up the phone and called Philippe Charles, SVP of manufacturing and supply chain for Dassault. “I told him I was in Zurich and a whole day had opened up on my calendar,” Nemmers recounts. “He said ‘Give me five minutes.’ Then he called back with an invitation to meet him and his team in Paris, and that was the beginning of the great relationship we built with Dassault over the next year and a half that led to the merger.”

Nemmers and his team had carefully and strategically grown the business and poured energy into building relationships with customers, serving 1,000 manufacturers located primarily in the U.S. whose 2,000 manufacturing facilities in 20 countries produce for the automotive, industrial equipment, medical device, consumer goods, and consumer packaged goods industries. The core MES and ERP platform could be expanded with more than 20 additional modules including CRM and payroll, all integrated in a single database.

“Dassault is a strategic vendor for enterprise manufacturers and was looking for a way to get into the SMB segment,” explains Venkatachalam. “Initially we talked about channel partnerships, but we had a feeling the discussion would pivot toward something more strategic.” Nemmers worked with TCV to conduct a robust M&A process that included more than 20 strategic vendors and investment firms. Dassault won the deal and completed the acquisition in early 2019.

The two companies already share around 600 customers, who use both IQMS solutions and Dassault’s SolidWorks platform to run their factories. From this foundation, IQMS can market to over 55,000 SolidWorks customers and Dassault can now address the world’s estimated 250,000 SMB manufacturers. Even the timing is perfect, because so many SMB manufacturers are now replacing legacy software that is reaching end-of-life. Randy and Nancy Flamm are happily ensconced on their ranch near the Pacific coast, while Nemmers guides his team and IQMS through its integration with Dassault and onward toward even greater success.

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Inside the Dollar Shave Club Revolution

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When consumer goods company Unilever bought Dollar Shave Club (DSC) in 2016, it was heralded as one of the biggest venture-backed e-commerce deals in history. It was also an acknowledgment that Dollar Shave Club had completely disrupted the men’s grooming market. In less than five years, the company had built an online community of millions of men who subscribed (literally) to the authentic mission of co-founder Michael Dubin: creating an alternative to going to the store for razors.

Dubin disliked everything about the experience – the locked case, waiting for the key, the high prices – and he knew other men felt the same way. So he launched an online subscription for well-priced razors and related products, delivered to your door. After nearly a year in beta, Dubin had another epically good idea: he would take his story directly to men on social media, starting with a sly YouTube video starring himself, his bare-bones warehouse, and a guy in a bear suit.

The video went live the same day Dollar Shave Club did, on a March morning in 2012. It promptly went viral. A rush of orders crashed the website in the first hour. By the next morning, Dollar Shave Club had 12,000 new members.

TCV saw the potential based on its experience in helping scale up other e-commerce portfolio companies. When TCV reached out to Dollar Shave Club about a prospective investment, Dubin recognized the opportunity. As he said in an online interview in 2013, he wanted “investors that can help you beyond just writing a check – the type of investors [that can] bring talent to us, and also had seen a lot in the e-commerce space and could help us avoid pitfalls they had seen others fall into.”

Dollar Shave Club’s equity funding from TCV made sure the young company could keep up the pace of customer acquisition at even higher efficiency, build out new product lines, bring distribution in-house, hire executive talent, and build an infrastructure to cope with rapid growth.

TCV also delivered on Dubin’s ask for value beyond funding. TCV General Partner Woody Marshall joined the Dollar Shave Club board of directors, and the firm brought in additional talent from its e-commerce portfolio companies. Dan Murray, the former CFO of Fandango, became Dollar Shave Club’s CFO. Andy Rendich, former head of operations for Netflix, advised Dubin on logistics and distribution, and marketing mavens from Netflix and Zillow offered veteran advice.

“Dollar Shave Club has built a great brand and is a category leader in the e-commerce space,” notes Marshall. “Michael himself has remained authentic to his consumer, has continued to deliver great products, and has shown that he is an exceptional team builder and leader of people.”

“TCV has been a great advisor and believer in what we are trying to do. They have a great network of experts who’ve always been available when I needed them. Working with them has been a terrific experience, and I would refer them to any CEO looking for a partner to help grow his or her business.”

– Michael Dubin, CEO of Dollar Shave Club

By the end of 2015, Dollar Shave Club had more than 3 million members generating more than $150 million in revenue from razors and other grooming products. That prompted Unilever to engage Dollar Shave Club in discussions that ultimately led to the acquisition in 2016. It also proved once again that when a determined entrepreneur with an authentic mission teams up with smart investors with an eye for fast growth, good things can happen.