Making the Mundane Sexy: How Intuit Turned SMB Bookkeeping and DIY taxes into Massive Business Lines

Dan Wernikoff rose to become an EVP at Intuit and general manager of its small business unit and consumer tax group. In both cases he scaled the business-within-a-business from small groups of early adopters to huge hordes of happy SMBs and consumers, by relentlessly measuring early indicators, leveraging core strengths, and focusing on long-term growth goals.

In this conversation with TCV General Partner Tim McAdam, he shares:

  • Lessons about how selling into SMB markets differs from enterprise
  • The best metrics for tracking success, and
  • Why empathy and understanding matter more than slick ads and sales techniques.

He also explains how to infuse human expertise into SaaS models in a way that fits the SMB/consumer mindset.

For these insights and more, settle back and press play.

***

Dan Wernikoff is a former Venture Partner at TCV.

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 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/.


Cloud Technology Leader Clio Announces $250 USD Million Investment from TCV and JMI to Transform the Legal Industry

Dublin, ROI, Sept. 04, 2019 (GLOBE NEWSWIRE) — Clio, the leader in cloud-based legal technology, announced today it has raised $250 million USD in Series D funding from TCV and JMI Equity. The investment marks one of the largest private transactions in legal technology and a definitive shift for the future of the legal industry.  

As reported by the World Justice Project, 59% of individuals in the United Kingdom experienced a legal problem in the past two years, but only 28% were able to access help with many (48%) seeking advice from a friend or family member. Yet, there were over 138,000 practising solicitors as reported by the Law Society of England and Wales, with 63% of those residing in Dublin. 

“It’s clear something needs to change when the majority of legal problems don’t receive legal assistance,” said Jack Newton, CEO and Co-founder of Clio. “Clio is committed to building the essential operating system for solicitors, one that focuses relentlessly on unlocking new efficiencies and entry points to legal services. This will allow legal professionals to easily deliver exceptional client experiences, increase their productivity, grow their firms, and make legal services more accessible. This investment will accelerate our ability to realize this vision.”

Founded in 2008, with their European headquarters based in Dublin, Clio will use these funds to amplify efforts to support access to legal services across Europe. Clio is the only legal case management software endorsed and approved by both the Law Society of England and Wales and the Law Society of Scotland due to their robust product, exceptional customer care, and commitment to helping law firms meet GDPR & SRA compliance responsibilities as data controllers.  

“At TCV, we partner with innovative companies that are leaders in their industry and offer superior value propositions for their customers,” said Amol Helekar, Principal at TCV, and a member of Clio’s board of directors. “Clio has had long-standing success in transforming a vast industry that has been lagging in technology adoption and we are confident the company will continue to lead on a global scale. We are committed to supporting Clio with TCV’s resources and network in order to help them capitalize on their significant growth opportunities,” added Jake Reynolds, General Partner at TCV.

TCV and JMI have been investment partners to innovative technology companies such as Adaptive Insights, Airbnb, Eloqua, Expedia, Facebook, Netflix, PointClickCare, ServiceNow, and Spotify, and have helped these businesses achieve their growth objectives.

“We believe the legal software space presents significant opportunities for continued disruption, and Clio is the clear leader,” said Matt Emery, General Partner at JMI Equity who has joined Clio’s board of directors. “Clio is not only solving some of the biggest pain points for the legal profession, it is creating a platform for the future of legal services, and we look forward to partnering with the team in the company’s continued growth and success,” added Sureel Sheth, Principal at JMI.

Customers can expect to see ongoing investment in the depth and breadth of Clio’s offerings, with even more powerful and flexible tools for legal professionals to manage and grow their practices, making them more efficient and sustainable as businesses. Mark Britton, former Expedia executive and founder of legal marketplace Avvo.com, will also be joining Clio’s board of directors to provide his own industry experience as the company brings their vision for the future of legal to market. 

Raymond James served as legal buyside advisor to TCV for this investment.

###

About Clio

Clio (Themis Solutions Inc.), the leader in cloud-based legal technology, empowers legal professionals to be both client-centered and firm focused through cloud-based legal practice management software. Clio has been transforming the industry for over a decade with 150,000 customers spanning 100 countries, and the approval of over 66 bar associations and law societies globally. Clio continues to lead the industry with initiatives like the Legal Trends Report, the Clio Cloud Conference, and the Clio Academic Access Program. Learn more at clio.com/uk.

About TCV

Founded in 1995, TCV provides capital to growth-stage private and public companies in the technology industry. TCV has invested over $12 billion in leading technology companies and has helped guide CEOs through more than 120 IPOs and strategic acquisitions. 

TCV’s software and legal technology investments include Alarm.com, Altiris, Ariba, Avalara, Avetta, Avvo, AxiomSL, CCC Information Services, ExactTarget, ETQ, FinancialForce, Genesys, IQMS, LegalZoom, OpenText, OSIsoft, Rapid7, Rave Mobile Safety, RELEX Solutions, Sitecore, SiteMinder, SMT, Splunk, Toast, Xero, and more. TCV is headquartered in Menlo Park, California, with offices in New York and London. For more information about TCV, including a complete list of TCV investments, please visit tcv.com.  

About JMI Equity

JMI Equity is a growth equity firm focused on investing in leading software companies. Founded in 1992, JMI has invested in over 145 businesses in its target markets, successfully completed over 95 exits and raised more than $4 billion of committed capital. JMI partners with exceptional management teams to help build their companies into industry leaders. For more information visit jmi.com.

Attachments

Sasha Perrin
Senior Manager, Brand and Communications, Clio
1-800-347-8314
sasha.perrin@clio.com

Katja Gagen
Principal + Head of Marketing, TCV
650-614-8264
kgagen@tcv.com

HireVue to Receive Growth Investment from New Majority Investor The Carlyle Group

SALT LAKE CITY, Sept. 3, 2019 /PRNewswire/ — HireVue, provider of the most comprehensive suite of AI-driven talent assessment and video interviewing solutions, today announced that global investment firm The Carlyle Group (NASDAQ: CG) has signed an agreement to invest in HireVue as its majority investor. Existing shareholders, including TCV, Granite Ventures and Sequoia, together with HireVue management, will remain minority investors.

Over its 15-year history, HireVue has transformed the way companies discover, hire and develop the most diverse set of top talent. HireVue customers, who include over one-third of the Fortune 100, generate strong returns on their investment by reducing the time it takes to hire a candidate by 90 percent on average, and by regularly achieving world-class candidate net promoter scores of more than 70, all while increasing the number of prospective candidates, hiring objectivity and the diversity of hires. HireVue pioneered the video interviewing industry and remains the leader today, delivering a million interviews and over 150,000 pre-hire assessments every 90 days.

“We are delighted to partner with Carlyle to accelerate HireVue’s technology innovation and propel our growth globally,” said Kevin Parker, Chairman and CEO at HireVue. “Carlyle’s culture of ‘performance through collaboration’ makes it our ideal partner as we expand to new markets and enhance our support of enterprise partners around the world.”

“HireVue is the recognized video interviewing and talent assessments leader,” said Patrick McCarter, Managing Director and Co-Head of TMT at The Carlyle Group. “Innovative global enterprises are driving more efficient and effective hiring through HireVue, accessing a broader, more diverse talent pool and significantly reducing bias.”

“We look forward to partnering with Kevin and the entire HireVue team to further accelerate the business and create even greater value for HireVue’s global employees, customers and partners,” said Tyler Parker, Vice President at The Carlyle Group.

“HireVue’s market-leading SaaS platform and suite of recruitment solutions assist global enterprises in finding, engaging and hiring the best talent,” said Nari Ansari, General Partner at TCV. “We are excited about the new partnership with Carlyle and HireVue’s next phase of growth.”

The current executive team at HireVue will continue to lead the company under the direction of Chairman and Chief Executive Officer Kevin Parker.

Equity capital for the investment will come from Carlyle Partners VII, an $18.5 billion fund. The Carlyle team leading the transaction focuses on investments in global technology, media and telecommunications (TMT) companies. TMT is a core area of focus for Carlyle, representing more than $30 billion of invested equity since inception. Goldman Sachs acted as exclusive financial advisor to HireVue.

HireVue’s Solutions

The HireVue Assessment and Video Interviewing Platform combine the power of video, AI, game and technical challenges for comprehensive hiring intelligence. Validated behavioral science is the foundation of HireVue’s highly effective pre-hire assessments, which are rigorously bias-tested according to the EEOC’s Uniform Guidelines and used to support greater diversity and efficiency in hiring. HireVue customers report lower attrition and high return on investment.

In addition, the HireVue Assessment and Video Interviewing Platform is the only platform in its industry that can scale to support the growth of enterprise customers. HireVue has achieved numerous industry and federal certifications, including:

  • ISO/IEC 27001:2013 certification
  • SOC 2 Type 2 assurance
  • FedRAMP authorization

For more information about HireVue or to schedule a demo, visit www.hirevue.com.

About HireVue

HireVue is transforming the way companies discover, hire and develop the best talent by combining the power of video, games and AI for better hiring decisions. The HireVue Assessments and Video Interviewing Platform uses a ground-breaking combination of industrial/organizational science and rigorously tested, predictive artificial intelligence to help customers find and engage higher quality talent, faster. HireVue is available worldwide in over 30 languages and has hosted more than ten million on-demand interviews and one million assessments. Its more than 700 customers worldwide include over one-third of the Fortune 100 and leading brands such as Unilever, Hilton, JP Morgan Chase, Delta Air Lines, Vodafone, Carnival Cruise Line, and Goldman Sachs. For more information, visit www.hirevue.com.

HireVue Social Networks

Twitter:www.twitter.com/HireVue
LinkedIn:www.linkedin.com/company/hirevue 
Facebook:www.facebook.com/HireVue 
YouTube:www.YouTube.com/user/HireVue
Instagram:www.instagram.com/hirevue/

About The Carlyle Group

The Carlyle Group (NASDAQ: CG) is a global investment firm with deep industry expertise that deploys private capital across four business segments: Corporate Private Equity, Real Assets, Global Credit and Investment Solutions. With $223 billion of assets under management as of June 30, 2019, Carlyle’s purpose is to invest wisely and create value on behalf of its investors, portfolio companies and the communities in which we live and invest. The Carlyle Group employs more than 1,775 people in 33 offices across six continents.


TripAdvisor: Elevating People Functions to Business Partnership

Part 1: Aligning HR with Business Strategy

When Beth Grous joined TripAdvisor as Chief People Officer, the popular travel platform was growing rapidly, with 40+ locations around the world. Beth quickly moved to develop Human Resources (HR) as a strategic partner for business functions, so that the team’s initiatives would more directly support company objectives. In this first part of a two-part conversation, Beth talks with TCV GP Nari Ansari about how she re-oriented her team for business partnership. She also explains how her team manages the employee journey within TripAdvisor as strategically as the company manages its customer journeys, so that recruiting and retaining talent is both systematic and flexible for an increasingly diverse workforce.

***

Nari Ansari: First off Beth, I really appreciate you taking the time to chat with us. It was great seeing you at TCV’s East Coast CHRO event in New York with portfolio company people and talent leaders. We had some great conversations and wanted to share a few topics with a broader audience.

Beth Grous: Absolutely. Great to speak again.

Nari Ansari: Let’s dive right in, starting with TripAdvisor. What does the company do?

Beth Grous: I think most people who have traveled, or know someone that’s traveled, are familiar with TripAdvisor. We are the world’s largest travel platform. We help about 490 million travelers every month plan, book, and get excited about having the best trip of their life. We’re a global website, and we also have a mobile app that helps travelers browse more than three-quarters of a billion reviews and opinions on over eight million restaurants, accommodations, experiences, airlines, cruises, and so on.

Nari Ansari: When did you join? What motivated you to jump onboard?

Beth Grous: I joined TripAdvisor in September of 2015. I’ve been a review writing member on the TripAdvisor platform since 2006 so I was a long-time consumer of the brand and loved it. When I got the call about the job, I thought that it would be a unique opportunity for me to take the HR skills, experience and capabilities that I had, and intersect them with a consumer brand that I have a lot of passion for.

Around the same time frame there was an increasing recognition at TripAdvisor that with 2,500 employees, and the company growing globally, we really needed to elevate the people function to work in partnership with the CEO to execute more strategically against our business and talent priorities. And so that was very exciting for me as well, thinking about the potential impact I could have.

Nari Ansari: Absolutely. You’re titled Chief People Officer, so what areas fall under your responsibility?

Beth Grous: That’s a great question, because my job description is perhaps a little different than most heads of HR.

As Chief People Officer, I have all the traditional HR domains:

  • HR business partners
  • Total rewards (compensation and benefits) and HR systems
  • Talent acquisition (our recruiting engine)
  • Learning and organizational development
  • Equity, diversity, and inclusion

In addition to those more typical functions, I have a few other areas of responsibility, including our global real estate portfolio and office experience for our 40+ offices worldwide, and our social impact function, which is a combination of both our TripAdvisor Charitable Foundation and our employee volunteerism and giving activities.

Nari Ansari: Since you became Chief People Officer, how have you established the HR team as a business partner to the rest of the organization? What steps did you take, what lessons did you learn as you industrialized the function, and what advice would you have for other HR leaders of growing tech companies out there?

Beth Grous: When I joined, I looked around and I said, “There are some places where we have real strengths, and some places where we need to fill in some blanks.” Probably the biggest shift we made was to build out an HR business partner (HRBP) function – we wanted to shift a portion of our team from being more focused on tactical day-to-day priorities to taking a pro-active focus towards business objectives and working with their counterparts throughout the organization. That shift in focus meant that some people stepped up to develop their skills and to work differently. Other team members transitioned out of the organization and, also importantly, we had a few members join from the business side.  It was a significant shift to staff and organize this HR business partner team.

Nari Ansari: That’s an impressive shift. Tell us a bit more about the role and skill set of HR business partners.

Beth Grous: The members of our HRBP team are expected to have a deep understanding of the business—financials, strategy, and how each business function aligns and interacts to execute against those objectives. I encourage the HRBP team to frame their day-to-day work by asking the question: “How am I working with people at all levels of the organization to help drive the business forward?” Much of this learning happens on the job—and our business leaders are very supportive of sharing their expertise. It has been an important shift for us, because with this knowledge and understanding, they can then support the business most effectively: defining the right organizational structure to support strategy, ensuring that we are hiring and developing a diverse and talented group of employees across the organization, and aligning rewards, as some examples.

I am fortunate that I work for a CEO and with an executive team who greatly values the input of our people and human capital team on matters not just related to HR domain areas, but also matters related to the overall business. This has been exciting and fulfilling for me and my team.

Nari Ansari: That’s great. I think what’s top of mind for many company leaders and talent leaders is retaining exceptional talent. You talked a bit at our recent TCV CHRO event that TripAdvisor very methodically thinks through, manages, and monitors the customer journey and that you and your team symmetrically are methodically thinking through, managing, and monitoring the employee journey as well. Can you talk a little bit more about what that looks like for your 3,600 plus TripAdvisor team members today spread across 40+ offices?

Beth Grous: I’m going to make an obvious statement here. If you retain and engage more of your workforce, you have less of a need to recruit people…

Nari Ansari: Right.

Beth Grous: We recognize that those two things sit in a very healthy and logical balance. We also recognize that turnover in and of itself is painful. You lose institutional knowledge. It’s disruptive to teams. It slows throughput. It slows innovation. We’re only as good as the people that we have working in the right teams and right configurations to execute against our business objective. We think a lot about how to make TripAdvisor a great place to work, to encourage not only retention, but also to drive engagement and satisfaction. Just like our sales team thinks about the “customer first”, we think about how we can put our employees first. That also means that we are taking their views into account, so it’s not just about delivering “HR services” to our employees but having a dialogue with them. This aligns with our brand, which is all about transparency and providing honest and constructive feedback. For example, we know that what makes a company a great place to work likely means different things to different people. To someone early in their career, that might mean, “I get to have a lot of different experiences and I’m promoted pretty rapidly.” To someone in a different phase of life or with different interests or needs, that might be that an individual wants a lot of flexibility in terms of the hours when they work or the places where they work. We encourage flexibility, and we also have office spaces with many different places where people can get away from their desks if that helps them work more effectively. We think about our workforce just like TripAdvisor (and many consumer-facing companies) think about their customers, recognizing that one size doesn’t fit all. That does not mean that we can necessarily be all things to all people—but we try hard to listen, learn, and discern what’s most important to our workforce, and meet our employees’ needs, as long as it makes sense for the business. 

I believe that there are some things that transcend all employees, regardless of role, experience or tenure. Employees want to come to work at a place where they understand the business objectives, they understand the strategy, and they know their role, how their role ladders up to executing against that strategy. So as a company, we spend a ton of time being transparent about those elements – we do that through company town halls, through company meetings and through various forms of communication. Communication is so important, and I don’t think we can ever do enough of it internally! We’ve found it critical for our employees to understand the business context and importantly, how they fit into that context, so that they can be most successful—and therefore we can be most successful as a company.

Nari Ansari:  That makes a lot of sense. I do think that having a much more rigorous multi-faceted view of your employee base is becoming critical for companies of all sizes and in all industries.  And I also think open communication across the organization is important, particularly when it feels like change is the only constant these days.

Another trend – and transition – we are seeing is that HR is becoming more tech and data driven to deliver on human capital and business goals. We’ll talk more about this in a follow-up Q&A and address other topics that are top of mind for today’s HR professionals and tech companies, including HR’s role in successfully executing acquisitions. Thanks so much for sharing your thoughts with us, and I look forward to our next conversation.

Beth Grous: My pleasure!

###

The statements, 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 interview 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, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.


FlixMobility Completes New Funding Round Led by TCV and Permira

  • Funding round completed with strategic investments from TCV, Permira and existing investors
  • Financing will fuel expansion of FlixBus network in the United States as well as market-entries in South America and Asia and the rollout of FlixTrain
  • FlixCar ride sharing brand to launch in 2020 to complement existing bus and train networks in EU

New York/Munich (July 18, 2019) – FlixMobility GmbH, the parent company of global mobility platforms FlixBus and FlixTrain, has announced the completion of its Series F funding round co-led by TCV and Permira, two of the largest growth equity firms backing private and public technology companies. Long-time investor HV Holtzbrinck Ventures also participated in the round through a joint co-investment with European Investment Bank, providing local expertise and expert knowledge to scale the business further. The newest FlixMobility investors join existing shareholders including General Atlantic, a leading global growth equity firm, and Silver Lake, a global leader in technology investing, who have helped the company rapidly grow from start-up to global mobility provider.

The equity raised will be used for global expansion as well as the launch of new FlixMobility products. FlixBus is targeting market leadership in the United States and will launch into new global markets in South America and Asia in 2020. For the FlixTrain brand, the investment will help expansions into new EU countries following the liberalization of the European rail market in 2020 in addition to growing the product within the German market where FlixTrain already operates multiple cross-country routes. Furthermore, the investment will be used to launch FlixCar, a ride sharing platform that will complement the existing FlixBus and FlixTrain networks.

“What began in 2013 as a German startup has become a powerful mobility platform that continues to change the way millions of people travel across Europe and the United States,” said Jochen Engert, CEO and founder of FlixMobility. “Through our strategic partnership with TCV and Permira, which have decades of experience and a portfolio of world-leading technology companies, we will accelerate our growth to offer smart and green travel to more people across the world via the FlixBus, FlixTrain and soon FlixCar brands, while strengthening our position in existing markets.”

“We could not be more excited to partner with Jochen, André, Daniel and the entire FlixMobility team,” said John Doran, General Partner at TCV. “We have been following their success for a number of years, and greatly admire what they have been able to achieve over this time. TCV’s strategy is to back companies led by visionary founders and offering superb value propositions to its customers and partners – we believe FlixMobility does exactly that.”

“We are very excited to join the ride with FlixMobility and its founders in the future. They have written an impressive success story and transformed the company into a leading global mobility platform for mid-and-long distance travel. With our proven expertise in the technology sector, we look forward to supporting FlixMobility’s strong management team in the next phase of the growth strategy focusing on further internationalization, acquisitions and the expansion of the train offering”, said Stefan Dziarski, Partner at Permira. “With the investment in FlixMobility, the Permira funds underline their position as one of the largest technology investors in Europe. FlixMobility – with its high growth rates and global footprint – is a perfect fit for the new Permira Growth Opportunities Fund, focusing on larger minority investments in our core areas of expertise.”

Both John Doran, General Partner at TCV, and Stefan Dziarski, Partner at Permira, will join FlixMobility’s Board of Directors.

From German Startup to World-Leading Mobility Player
Revolutionizing European long-distance travel since 2013, FlixMobility is a provider of convenient and affordable intercity travel to millions of passengers, with 45 million people using FlixBus and FlixTrain in 2018 alone, through 350,000 daily connections to over 2,000 destinations. FlixMobility is the undisputed market leader across Europe and expanded to the US in 2018 for service to a total of 29 countries. The company works with more than 300 independent bus and train partners and has created over 10,000 jobs in the industry.

In 2018, FlixTrain was launched, bringing the FlixBus model to the rail industry in Germany. In 2019, the company also applied for rail tracks in Sweden and France in preparation of expanding FlixTrain with the upcoming liberalization of the European railway.

Approximately 1,300 employees work for FlixBus and FlixTrain within 19 offices in 17 countries. By working with employees on the ground within FlixBus markets, the company is able to consistently adapt to both the market and local customer needs.

Options for Every Traveler: The Launch of FlixCar

With FlixBus and FlixTrain, FlixMobility offers an ever-expanding and integrated network, enabling people to plan flexible and customizable journeys. In an effort to bring smart and green mobility to even more people – and to offer even more door-to-door connections – FlixMobility is preparing the launch of FlixCar, a car-pooling service perfectly suited to expand the network offering to even more destinations.

“From the very beginning, we have positioned ourselves not as a bus or transportation company, but rather a mobility provider: we offer smart, affordable and climate friendly travel, whether by bus, train or – soon – ride sharing,” said Engert. “FlixCar is a logical next step in extending our network so that we can enable even more people to experience the world. On average, the occupancy rate for cars is a mere 1.5. Ride sharing is a great way to split fuel costs and lower your impact on the climate.”

MEDIA CONTACTS:
Brittany Posey, FlixBus
brittany.posey@flixbus.com
+49 (0)89 235 135 132

Katja Gagen, TCV
kgagen@tcv.com
+1 (415) 690 6689

About FlixMobility

FlixMobility is a young mobility provider, offering new alternatives for convenient, affordable and environmentally-friendly travel via the FlixBus and FlixTrain brands. Thanks to a unique business model and innovative technology, the startup has quickly established Europe’s largest long-distance bus network and launched the first green long-distance trains in 2018 as well as a pilot project for all-electric buses in Germany and France. Since 2013, FlixMobility has changed the way over 100 million people have traveled throughout Europe and created thousands of new jobs in the mobility industry. In 2018, FlixMobility launched FlixBus USA to bring this new travel alternative to the United States.

From locations throughout Europe and the United States, the FlixTeam handles technology development, network planning, operations control, marketing & sales, quality management and continuous product expansion. The daily scheduled service and green FlixBus fleet is managed by bus partners from regional SMEs, while FlixTrain operates in cooperation with private train companies. Through these partnerships, innovation, entrepreneurial spirit and a strong international brand meet the experience and quality of tradition. The unique combination of technology start-up, e-commerce platform and classic transport company has positioned FlixMobility as a leader against major international corporations, permanently changing the European mobility landscape. Further company news and pictures can be found in the newsroom.


About TCV

Founded in 1995, TCV provides capital to growth-stage private and public companies in the technology industry. Since inception, TCV has invested over $11 billion in more than 250 companies and has helped guide CEOs through more than 120 IPOs and strategic acquisitions. TCV has deployed over $1.5 billion in Europe. TCV’s investments include Airbnb, Believe Digital, Dollar Shave Club, EmbanetCompass, ExactTarget, Expedia, Facebook, Fandango, GoDaddy, HomeAway, LinkedIn, Netflix, RELEX Solutions, Rent the Runway, Sitecore, Splunk, Spotify, Sportradar, The Pracuj Group, TourRadar, WorldRemit, and Zillow. TCV is headquartered in Menlo Park, California, with offices in New York and London. For more information about TCV, including a complete list of TCV investments, visit https://www.tcv.com.


Vectra raises $100 million led by TCV to secure the cloud using network threat detection and response

SAN JOSE, Calif., June 10, 2019 /PRNewswire/ — Vectra, the leader in network threat detection and response (NDR), today closed a $100 million round of funding led by TCV, one of the largest growth equity firms backing private and public technology companies. Existing investors also participated in the funding round, bringing the company’s total funding to date to more than $200 million.

Vectra will use the investment to accelerate global market expansion and R&D innovation, solidifying its Cognito platform as the market-leading solution for artificial intelligence (AI)-driven cloud security using NDR.

The cloud has critical security gaps that leave organizations vulnerable. Cyberattackers take advantage of these gaps without leaving a trail of evidence. Underscoring this risk, a recent survey by the SANS Institute found that one in five businesses had serious unauthorized access to their cloud environments this past year alone, and many more were unknowingly breached.

The Cognito platform addresses these security gaps by providing 360-degree visibility into cloud, data center, user and internet-of-things (IoT) infrastructure, leaving attackers with nowhere to hide.

“TCV has an extensive track record of partnering with enterprise security companies, including Rapid7 and Splunk, from growth stage to public,” said Tim McAdam, general partner at TCV and a member of the Vectra board of directors. “In our research on the category, it became clear to us that Vectra was rapidly gaining momentum with customers by rethinking the way enterprises view both network and cloud security. The Vectra Cognito platform is poised to become requisite in the security infrastructure of multinational enterprises and midsize businesses alike.”

“The cloud has inherent security blind spots, making it imperative to eliminate cyber-risks as enterprises move their business to the cloud,” said Hitesh Sheth, president and chief executive officer at Vectra. “The Cognito platform enables them to stop hidden cyberattacks in the cloud. We look forward to partnering with TCV and our existing investors as we continue our rapid growth.”

Vectra experienced 104% growth in annual recurring revenue in 2018 compared to 2017. The company will continue to ramp up initiatives aimed at addressing the global deficit in cloud security, innovating on its existing platform and expanding its global customer base.

Cloud Security Solutions Forecast, 2018 to 2023” by Forrester Research, Inc.

About Vectra
Vectra® is the leader in network detection and response – from cloud and data center workloads to user and IoT devices. Its Cognito® platform accelerates threat detection and investigation using AI to enrich network metadata it collects and stores with the right context to detect, hunt and investigate known and unknown threats in real time. Vectra offers three applications on the Cognito platform to address high-priority use cases. Cognito Stream sends security-enriched metadata to data lakes and SIEMs. Cognito Recall is a cloud-based application to store and investigate threats in enriched metadata. And Cognito Detect uses AI to reveal and prioritize hidden and unknown attackers at speed. For more information, visit vectra.ai.

About TCV
Founded in 1995, TCV provides capital to growth-stage private and public companies in the technology industry. Since inception, TCV has raised over $15 billion in capital and has helped guide CEOs through more than 120 IPOs and strategic acquisitions. TCV’s investments include Airbnb, Altiris, AxiomSL, Dollar Shave Club, EmbanetCompass, EtQ, ExactTarget, Expedia, Facebook, Fandango, GoDaddy, HomeAway, LinkedIn, Netflix, OSIsoft, Rapid7, Rent the Runway, Sitecore, Splunk, Spotify, Varsity Tutors, Webroot, and Zillow. TCV is headquartered in Menlo Park, California, with offices in New York and London. For more information about TCV, including a complete list of TCV investments, visit https://www.tcv.com.

Media contacts
John Kreuzer
Lumina Communications for Vectra
vectra@luminapr.com

Katja Gagen
TCV
kgagen@tcv.com 
415 690 6689

SOURCE Vectra

Related Links

https://www.vectra.ai

Toast: Building a System of Record for the Restaurant Industry

We believe that many SMB and vertical SaaS companies are starting to exhibit platform characteristics. Some of these companies are beginning to build consumer and supplier networks that are dramatically expanding the SaaS model.

Toast is a pioneer in the space, powering restaurants of all sizes with a technology platform that helps them streamline operations, increase revenue and deliver amazing guest experiences. No one lights up a room on these topics more than Tim Barash, Chief Business Officer and CFO at Toast. I’m also excited to welcome Tim as an Executive Advisor to TCV, where he will be working with TCV portfolio companies and helping us to assess new opportunities.

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Dave: Tim, welcome to TCV, and thanks so much for spending time to share your thoughts with us!

Tim: I am excited to be a part of the team — it’s been great to meet with some of the founders of this incredible new class of companies, changing the rules of what has traditionally been considered SaaS.

Dave: Tell us about Toast. What is the company today, what’s its mission, and where is it going?

Tim: Toast is a company that is transforming the hospitality industry with an end-to-end platform, extending from a core commerce engine into guest experience, employee engagement, and financial services. Our mission is to empower the restaurant community to delight guests, do what they love, and thrive. We as Toasters are very passionate about bringing this mission to life for our customers. We launched our core offering in 2013 to the first few restaurants and today are serving tens of thousands of customers while still growing over 100%, with over 1,600 employees globally. It’s been a wild ride these past five years and it’s a really fun space with a creative and diverse customer set.

Dave: You and I recently hosted an offsite on “SaaS as a Platform.” Why is Toast a platform to its restaurant customers?  If you’re the CEO of a SaaS company, how do you know that you are or could be a platform?

Tim: Toast really extends all the way from the front of house to the back of the house, bringing restaurants into the 21st century with a cloud and mobility-first operating system, including hardware such as self-ordering kiosks and handhelds for order & pay-at-the-table and guest feedback. We’ve evolved from this core system of record into other high-value offerings, including payment processing, payroll & employee management software, credit and consumer-facing apps, and we’ve had great feedback from our customer base that they want us to continue to solve more problems for them between our first-party offerings and our deep partner network.

I think being the Platform or System of Record generally means you have the most mindshare and time spent on your system relative to others the same user may have. As important is where the data resides; in the restaurant vertical, the core data sets are menus, orders, guest data, and employee data, whereas other verticals like doctor’s offices might be more around scheduling, billing/invoicing, and insurance connectors. If the key personas are logging in multiple times per day and using your tool as the system of record for their most important data, it’s likely there are multiple platform opportunities to exploit to make their lives even easier.

Dave: Let’s first talk about payments. Generically the opportunity in payments is for SaaS companies to start monetizing flow through GMV. Why is this good for your customers, the end merchant, and your customer’s customer, the merchant’s consumer?

Tim: A lot of companies are starting to integrate payments mostly because it creates a much smoother, simpler experience for the merchant. It starts with onboarding and spans ongoing support and easy reconciliation of transactions and payments through the same software. Small businesses generally do not like having to deal with multiple vendors when they can use one holistic solution for what they are trying to get done.

What’s really compelling is what you can do for the merchant and the end user once you have payments integrated by capturing more data. An example is identifying the end user and better understand buying patterns and be able to help small businesses market to their customers in a more targeted and automated way.

There’s also very significant margin enhancement if you can get payments right, which can fuel higher investment levels in areas like Customer Success and R&D to deliver even more customer value by displacing a horizontal payments vendor.

Dave: I know you could hold a master class on just payments, but quickly what are three tips for getting started? Should you make them mandatory, or an option?

Tim: Understanding your strengths and weaknesses as a team here is important — you can get started with a referral partnership or go full bore and become a payment facilitator and handle all the risk, underwriting, and merchant-facing tech. It really depends on the available talent, domain knowledge, and capital access to get something off the ground. Once you’ve decided what to go with, here are three tips:

  1. Build a dedicated team that understands your payments space at a deep level — there can be a lot of new complexity across product, tech, risk/underwriting, pricing, go-to-market strategy, and customer success that may look and feel different from your existing business. Make sure at least 1-2 people are coming in with real payments or fintech experience. Card-present vs. eCommerce experience will likely be something to think about here.
  2. Resist the urge to over-monetize or make pricing overly complex — traditionally there have been some bad actors in the payments world and, as a result, a lot of these companies have low NPS and very high churn — great SaaS companies have the opposite, so don’t tempt fate for a few extra basis points.
  3. If you are doing anything other than an arms-length referral partnership, you should be taking payments-specific risk, fraud, and security very seriously.

Dave: Ok, so once you’ve launched payments, how would you extend next? I know it depends, so maybe talk about where you would go if you were a front office offering and a back-office offering. Or better yet, what is the prioritization framework for the different offerings?

Tim: I think the prioritization framework begins with mission — why does your company exist and what are the biggest problems in your industry that you have an unfair right to help solve? As an example, Toast is the source of lots of employee data and we kept hearing from our customers that, in the current macro environment, labor was their biggest concern, so we had both the market need and the natural entry point to get deeper into payroll and employee engagement.

On back-of-office solutions it’s likely things like payments, credit, payroll, insurance, and B2B/vendor marketplaces can be interesting depending on the platform and vertical. For front-of-house it’s likely more about CRM, marketing tools, loyalty programs, other commerce touchpoints, and the holy grail of leveraging supply of SMB’s to create a two-sided consumer marketplace. That said, there aren’t many companies that have made the B2B2C transition, yet it can be a tremendous value creator.

Dave: Credit is a big step change because it involves a balance sheet and underwriting to risk. What is your take?

Tim: I think this really depends on the execution muscle of your company — if you’ve already gone deep on something like payments, you may have some experience on the fraud and underwriting side, but getting into credit ups the ante in a big way. You need to feel confident you have some really strong players on data science, finance, and risk to go after this yourself. Starting with a partnership with a Kabbage, Fundbox, or OnDeck could be a way to dip the toe in the water before putting your capital at risk or trying to attract outside investors to supply the capital for a credit offering.

If you are going after this yourself, you will almost definitely want to find outside capital to offload most of the risk and balance sheet implications of a credit business, both for optics reasons with investors and because your capital is better put to use hiring engineering, sales, etc. than lending to your customers.

Dave: How about payroll? Big dollars given the per employee model. How do you know there’s real demand for payroll? Given the 50-state nature, would you do this in-house, partner, or buy?

Tim: If I think about this space, the only software business that didn’t have HCM/HRIS at its core that’s done this really well is Intuit, though Square is also starting to gain traction in their new offerings. Payroll/HCM is its own beast with its own ecosystem of products from worker’s comp and healthcare to newer technology offerings like same-day pay and employee management solutions. Similar to payments, capital, marketplaces, and other platform plays, the decision on whether to extend is all about whether you have a natural right to play. For Toast, we have restaurant employees clocking in and out every day on our platform, and managers/owners running staffing reports and approving hours before downloading the data and uploading to a payroll/HCM solution. This made it a pretty natural move to solve this disjointed experience for our customers.

If you’ve got the natural right to play, demand is probably dependent on the complexity in your vertical — if your customers only have 1-5 employees and not a lot of complexity around time and attendance, they may be using an offering from Intuit through their accounting package, or Gusto, or some other inexpensive and easy solution, making it more difficult to displace.

In terms of build/partner/buy, this could be a long slog to build, because of all the regulatory/compliance elements. Depending on your scale, partnering is likely the best way to enter into the space and learn this side of the business. Just be careful as one of the reasons to get into payroll/HCM is that it’s a fairly sticky product.

Dave: Ok, let’s get into the next-level network effects for SaaS companies. Most two-level networks tend to be “Big B to small B” in a buyer/supplier relationship. TCV invested in three of them over the years. To give the theme a plug — Ariba in procurement, CCC in the auto industry, and Avetta  in supplier information management and compliance. You sell into large company buyers and help them connect more efficiently to smaller/SMB consumers. Winning into the big buyers gives you a strong value proposition to small suppliers and gaining more suppliers in your network makes you even more attractive to the big buyers. It’s a virtuous cycle.

But every SaaS company, particularly vertical and SMB providers, can look to leverage consumer, employee, and supplier networks. What’s your take?

Tim: It’s a really exciting play that is starting to develop in SaaS. If done correctly, it can be a game changer in helping SMBs get the scale advantages of larger enterprises and change their businesses for the better.

Dave: Let’s take supplier networks first. Who is doing a good job getting into the supplier marketplace?

Tim: I think you just hit a few of the strong players earlier. What CCC has done with the auto parts marketplace is really exciting and a playbook that could be run by a lot of SaaS platforms in other verticals, especially something like construction or home services. I’ve seen a lot of startups try to create the supplier marketplaces in industries such as dental offices, restaurants, and others, but the standalone model can be difficult because they aren’t starting with one side of the marketplace already built up — that’s what’s so exciting about these platform opportunities for existing SaaS companies.

Dave: How about employees?

Tim: There are lot of interesting companies out there. For example, SnagAjob and ZipRecruiter are working on building out the marketplace. I think ZipRecruiter has been a really interesting story as they did leverage existing relationship with employers to create their marketplace. Over time, I think we will see a lot more of these models. There have been a few entrants into the “LinkedIn of hourly workers” space, and time will tell if something like that will be created or if more mindshare will go to vertical-specific SaaS/Employee Network plays. It’s interesting to think about the marginal utility of a horizontal employee network, certainly there are some generalists in this employee population but also a lot of specialization in specific trades and industries.

Dave: Consumers is probably where the big dollars are. Marketplaces regularly capture 10-40% of GMV to deliver consumers.  How can SaaS companies partake of the consumer opportunity?

Tim: I think it heavily depends on how valuable the supply side of the marketplace is. There are verticals including food, certain home services, hotels, etc. where quality and user-specific preference is going to really matter. If you have really compelling supply (especially if it is hard to access online), you can get real leverage in building out a consumer marketplace. If it’s something like transportation, it may be harder to have any real edge against a standalone marketplace startup.

If you are in a position to capitalize on a consumer network, I think creating a separate team to go after that opportunity in a big way is likely the right way to go as so many parts of the business will be different than your core SaaS team is used to working on. You want the unfair advantage of owning supply without a handicap of having a team that hasn’t built a consumer business before.

Dave: Well Tim, I know we could go on for hours on this topic. Thanks so much for taking the time today, and great to have you as part of the TCV team. I’m excited to work with you.

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Tim Barash is an Executive Advisor at TCV.

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/.


WorldRemit Raises $175m in Series D Funding

LONDON–(BUSINESS WIRE)–Leading mobile payments company WorldRemit has entered into a definitive agreement to raise $175 million in a Series D funding round led by returning investors, TCV, Accel and Leapfrog Investments.

Founded in 2010, WorldRemit is a global leader in smartphone and online payments – providing a convenient, low-cost alternative to expensive brick-and-mortar agents.

WorldRemit handles a growing share of the $700 billion remittances sent each year by expatriates and migrant workers to their home countries. Today, the company serves almost 4 million customers transferring money from 50 “send” countries to 150 “receive” countries.

Breon Corcoran, Chief Executive Officer of WorldRemit, said: “For more than eight years our core purpose has been and continues to be to help migrants send money to their families, friends and communities. Our customers play a key role in the economies where they work and their remittances are important to their home countries.”

“Our mission is to help them transfer money as securely and speedily as possible while reducing the cost to our customers. We will grow our business through differentiation on speed, service, security and value.”

“The leadership team is grateful to our investors for their continued commitment to the business. The new money will help us to further develop the offering and we will launch a solution for small and medium-sized businesses.”

The Series D funding round comes at a pivotal stage in the company’s growth. In 2018, the USA became WorldRemit’s largest send market, following the company becoming one of the first UK financial service firms to secure licenses in all 50 states.

WorldRemit will use this new investment to further drive global growth and diversify the company’s product offering for both money transfer senders and recipients. The company is also set to launch a new money transfer solution targeting small and medium-sized business owners who trade internationally, especially in emerging markets. The transaction is subject to customary closing conditions, including FCA approval.

TCV General Partner John Doran said: “Over the past eight years, Ismail and his founding team have built a fantastic business that offers customers a compelling solution and value proposition. Since passing the reins to Breon and the new management team last year, the business has continued to build on this platform and accelerated. We believe the opportunity and proposition is larger than ever.”

“In 2018, mobile and online payments to emerging markets reached a record high of $528 billion and we expect this number to increase. As WorldRemit handles a growing share of this market, we look forward to continue working with the company to scale its digital platform and expand its service to reach many new customers across the globe.”

Accel’s Harry Nelis said: “Having first partnered with the WorldRemit team in 2014, I have seen the company grow from a London-founded startup to a global business pioneering the future of the remittance market and making international mobile payments more accessible and affordable for millions of individuals and businesses. This investment and CEO Breon Corcoran’s experience leading consumer service-oriented, global digital businesses will help fuel the next phase of global growth. We are excited to deepen our relationship with the team and help them fulfil the company’s vast potential.”

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About WorldRemit

WorldRemit has disrupted an industry previously dominated by offline legacy players by taking international money transfers online – making them safer, faster and lower-cost. We currently send from 50 to 150 countries and operate in 6,500 money transfer corridors worldwide.

On the sending side WorldRemit is 100% digital (cashless), increasing convenience and enhancing security. For those receiving money, the company offers a wide range of options including bank deposit, cash collection, mobile airtime top-up and mobile money.

Backed by Accel, TCV and Leapfrog – early investors in Facebook, Netflix and Slack – WorldRemit’s headquarters are in London, UK with a global presence including offices in the United States, Canada, South Africa, Japan, Singapore, the Philippines, Australia and New Zealand.

About Accel

Accel is a leading venture capital firm that partners with exceptional founders with unique insights, from inception through all phases of private company growth. Atlassian, Algolia, Avito, Celonis, Cloudera, Crowdstrike, Deliveroo, DJI, Dropbox, Etsy, Facebook, Flipkart, Funding Circle, Kayak, Kry, QlikTech, Rovio, Slack, Spotify, Supercell, UIPath and WorldRemit are among the companies the firm has backed over the past 35+ years. The firm seeks to understand entrepreneurs as individuals, appreciate their originality and play to their strengths. Because greatness doesn’t have a stereotype. For more, visit www.accel.com, www.facebook.com/accel or www.twitter.com/accel.

About TCV

Founded in 1995, TCV provides capital to growth-stage private and public companies in the technology industry. Since inception, TCV has invested over $11 billion in leading technology companies and has helped guide CEOs through more than 120 IPOs and strategic acquisitions. TCV has invested over $1 billion in Europe. TCV’s investments include Airbnb, Altiris, AxiomSL, Believe, Dollar Shave Club, EmbanetCompass, EtQ, ExactTarget, Expedia, Facebook, Fandango, GoDaddy, HomeAway, LinkedIn, Netflix, OSIsoft, RELEX Solutions, Rent the Runway, Sitecore, Splunk, Sportradar, Spotify, TourRadar, Varsity Tutors, WorldRemit and Zillow. TCV is headquartered in Menlo Park, California, with offices in New York and London. For more information about TCV, including a complete list of TCV investments, visit https://www.tcv.com/.

Media contact: kgagen@tcv.com

About LeapFrog Investments

LeapFrog invests in extraordinary businesses in Africa and Asia. We partner with their leaders to achieve leaps of growth, profitability and impact. LeapFrog companies now operate across 33 markets reaching over 167 million people with financial services and healthcare. 135.9 million are low-income consumers often accessing insurance, savings, pensions, credit and healthcare for the first time. LeapFrog companies provide jobs and livelihoods to almost 124,000 people. These companies have grown on average by 39.2 per cent per annum since LeapFrog’s investment. LeapFrog was recently named by Fortune as one of the top five companies changing the world, the first private equity firm ever to be listed. www.leapfroginvest.com@leapfroginvest

Contacts

For more information:
WorldRemit
Jo Bancroft
media@worldremit.com


Modsy is Transforming the Future of Home Design and Furniture Shopping with $37M in Series C Funding Led by TCV

SAN FRANCISCO (PRWEB) MAY 21, 2019

Modsy, a leading online interior design service that leverages its proprietary 3D visualization technology to disrupt the way consumers design and shop for their home, announced today the closure of a $37M series C fundraising round led by TCV, with participation from existing investors Norwest Venture Partners, Advance Venture Partners (AVP), Comcast Ventures and others.

This round comes at a time when home design inspiration is plentiful and home furnishings is the fastest growing e-commerce category, but helping consumers bring their ideas to life is still a big pain point. Modsy has been building a transformative consumer experience to solve this market challenge and has scaled rapidly, expanding its customer base 450% since its previous funding round and creating over 2 million shoppable lifestyle renders since it launched. Modsy’s groundbreaking 3D technology offers the fastest way for consumers to receive affordable home design expertise by combining its AI-powered recommendation platform to curate items based on layout, style, color, and price. Additionally, 100% of the personalized product recommendations in each design are completely shoppable, which alleviates the burden of parsing through hundreds of furniture items online and in-store. The new funding from TCV will enable Modsy to continue to rapidly scale while further investing in 3D automation, expanding its retail marketplace and enhancing its design and concierge shopping services.

Shanna Tellerman, Founder and CEO of Modsy, said: “Modsy is the future of furniture shopping and we are thrilled to partner with such a forward-thinking and customer-centric firm like TCV to help us fulfill our vision. I founded Modsy on the premise that in the future we would all be shopping from a personalized catalog-like experience within a virtual version of our real homes. This new round of funding will bring us even closer to this reality. We are excited about partnering with TCV to build Modsy into a household name and furthering our mission of enabling our customers to create the home of their dreams!”

In addition to transforming the furniture industry and developing breakthrough technology, Modsy is working to level the playing field of securing funding for female founders. In 2018, 2.2% of women-led companies received venture capital funding, so TCV’s investment in Modsy is significant in helping to further support the growth of female-owned and operated companies. With this round, TCV’s Executive Vice President Tina Hoang-To has joined Modsy’s [female-majority] board alongside Shanna Tellerman, Modsy CEO, Courtney Robinson, Partner at Advance Venture Partners and Jeff Crowe, Managing Partner at Norwest Venture Partners.

Tina Hoang-To, Executive Vice President at TCV, said: “The U.S. home furnishing market is a massive, multi-billion dollar industry and we are seeing a very clear secular shift online. Modsy is redefining the way consumers can buy furniture by leveraging technology and machine learning to introduce efficiency, transparency, and affordability to an antiquated home design industry. We are excited to partner with Modsy and believe the company is well positioned to transform this industry in a significant way.”

Since its previous funding round, the company hired three key executives: Sam MacDonnell, Chief Technology Officer (formerly HotelTonight), Meredith Dunn, Chief Operating Officer (formerly StitchFix) and Mustafa Nafar, VP of Finance (formerly DoorDash, Best Buy). It also launched innovative features that enrich the Modsy journey including Live Swap, an industry-first feature that allows customers to quickly swap furniture and its 3D Style Editor, a groundbreaking tool that enables customers to edit their designs in real-time. Modsy most recently announced its first line of custom sofas and chairs designed completely from customer data to fill a gap in the market when it comes to price, fabrics and style. Modsy’s data-based innovations continue to position the company as a market leader and fast-moving disruptor in 3D technology, design and furniture commerce.    

About Modsy 
Modsy is a leading online interior design service that delivers highly realistic 3D designs of your exact room filled with shoppable pieces of furniture from top brands you can virtually “try on” products and designs before you buy–starting at just $69. At a breakthrough price point, Modsy is providing visualization and design services that were once inaccessible to the masses and making it a no brainer purchase for any consumer on the market for furniture. Modsy provides unlimited revisions to your designs through its groundbreaking tools or by working directly with Modsy Designers. After finalizing a design, Modsy makes the check out process easy and gives customers access to exclusive discounts on their aggregated cart that easily pay back the initial design fee. Modsy’s name even comes from a combination of “modern design” and “easy”! Modsy’s mission is to change the way consumers imagine, design and shop for their homes.

Modsy has raised a total of $70.75M in venture capital funding. In addition to Modsy’s series C round of $37M led by TCV, previous investors include Advance Venture Partners (AVP) who led Modsy’s Series B round of $23M, Norwest Venture Partners who led Modsy’s Series A round of $8M and participated in Series B, NBCUniversal Cable Entertainment, Comcast Ventures, GV (formerly Google Ventures), Birchmere Ventures, and BBG.

About TCV 
Founded in 1995, TCV provides capital to growth-stage private and public companies in the technology industry. TCV has invested over $11 billion in leading technology companies and has helped guide CEOs through more than 120 IPOs and strategic acquisitions.

TCV’s internet and software investments include Airbnb, Altiris, AxiomSL, Believe Digital, Dollar Shave Club, ExactTarget, Expedia, Facebook, Fandango, GoDaddy, HomeAway, LinkedIn, Minted, Netflix, Rent the Runway, Sitecore, Splunk, Spotify, TourRadar, Varsity Tutors, and Zillow. TCV is headquartered in Menlo Park, California, with offices in New York and London. For more information about TCV, including a complete list of TCV investments, please visit http://www.tcv.com.

Media Contacts: 
Allie Rosenberg 
Modsy 
allie@modsy.com 
modsy@smallgirlspr.com

Katja Gagen 
TCV 
415 690 6689 
kgagen@tcv.com


Factory Software from Wine Country

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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