Revolut raises $500
million in Series D funding, valuing the business at $5.5 billion, making Revolut
one of the highest valued fintech companies in the world
The round was led by
US-based investor TCV, with a number of existing investors also participating
in the round
Revolut will use the
capital to further strengthen product development in existing markets, roll-out
banking operations in Europe and increase daily engagement
LONDON, 25 February 2020 — Revolut, the global financial platform with over 10 million customers worldwide, has today raised an additional $500 million in Series D funding, taking the total amount raised by the company to $836 million.
The new
funding round was led by US-based growth capital firm TCV, with a number of
existing investors also participating. The latest funding round values the
business at $5.5 billion, making Revolut one of the highest valued fintech
companies in the world.
The new
capital was secured on the back of high customer demand and engagement and a
strong financial performance last year. In 2019, Revolut increased customer
growth by 169%, the number of daily active customers by 380%, and saw financial
revenues in 2018 grow by 354%.
The new
capital will be focused on the customer experience and used to strengthen
Revolut’s core retail and business offering in existing markets, with a
particular focus on product development that will help accelerate daily usage
of accounts. Future plans include lending services for retail and business
customers, extending high interest savings accounts beyond the UK, further
improving customer service and rolling out banking operations across
Europe.
Revolut will
also focus on further developing its Premium and Metal subscription accounts,
which have proven to be a successful revenue stream for the business, growing
by 154% last year. Revolut’s Premium and Metal accounts include a variety of
benefits for customers, such as unlimited foreign exchange, airport lounge
access, commission-free stock trading and travel insurance.
Revolut will
continue to invest in expanding its workforce across multiple locations. The
company now employs over 2,000 people, and last year made a number of senior
appointments across the business in order to scale up its governance. Last
year, Revolut appointed Martin Gilbert, the former Co-Chief Executive of
Standard Life Aberdeen, as Chairman of the Board. Caroline Britton, a former
Audit Partner at Deloitte, and Bruce Wallace, the former Chief Operations
Officer at Silicon Valley Bank, were both appointed as Non-Executive
Directors.
Commenting
on the new investment, Nik Storonsky, Founder & CEO at Revolut said: “We’re
on a mission to build a global financial platform – a single app where our
customers can manage all of their daily finances, and this investment
demonstrates investor confidence in our business model. Going forward, our
focus is on rolling-out banking operations in Europe, increasing the number of
people who use Revolut as their daily account, and striving towards
profitability. TCV has a long history of backing founders who are changing
their industries on a global scale, so we are excited to partner with them as
we prepare for the next stage of our journey.”
Commenting
on the investment, John Doran, General Partner at TCV said: “We are delighted
to partner with Nik, Vlad and the entire Revolut team. Using a modern
technology stack and with a relentless focus on delighting customers, Revolut
has built a truly exceptional customer experience that is exceeding anything
that existing banks can offer. We look forward to supporting the team on their
journey to build Revolut into one of the biggest financial services companies
in the world.”
Commenting
on the investment, John Glen MP, the UK Economic Secretary and City Minister
said: “It is clear that the UK fintech sector continues to thrive, and
Revolut’s announcement, which comes on the back of record-breaking fintech
venture capital investment in 2019, is a clear indicator of our strength as a
place for fintech business as we leave the EU.”
— END —
About
Revolut
Revolut is
here to transform the way money works. As an innovative, new kind of
financial platform, it gives people the power to spend, invest and transfer
money without the sky-high fees charged by the big banks.
Since
launching in 2015 in the UK, Revolut has expanded significantly beyond its
origins as an FX product, adding new features all the time, including
Commission-Free Stock Trading, Cryptocurrencies, Business Accounts and
more.
Headquartered
in London, with 2,000 people in 23 offices, Revolut is now one of the biggest
Fintech communities in the world, with over 10 million customers globally.
Since launch, Revolut has processed over 1bn transactions worth over $130bn.
Revolut Press Contact Chad West, Director, Global Communications chad@revolut.com l +447860651737
Kiran Wylie, Senior Communications Manager kiran@revolut.com l +447875057754
About TCV
Founded in
1995, TCV provides capital to growth-stage private and public companies in the
technology industry. Since its inception, TCV has invested over $13 billion in
leading technology companies, including more than $1.5 billion in fintech, and
has helped guide CEOs through more than 120 IPOs and strategic acquisitions.
TCV’s
investments include Airbnb, AxiomSL, Dollar Shave Club, ExactTarget, Expedia,
Facebook, LinkedIn, Netflix, Nubank, Payoneer, Splunk, Spotify, Toast,
WorldRemit, Xero, and Zillow. In Europe, TCV has invested $2 billion in
companies including Believe Digital, Brillen.de,
Perfecto, FlixMobility, RELEX Solutions, RMS, Sportradar, The Pracuj Group, and
WorldRemit. 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/.
We believe that SaaS vendors, particularly vertical and SMB, that provide a “system of record” are seeing massive increases in TAM, competitive moats, and economic opportunity. By extending and leveraging their workflow, data, and account ownership, SaaS vendors are delighting end customers while creating platform and networks.
With
opportunity comes competition, both from within one’s category (e.g.
application area) or from adjacent categories within one’s vertical (e.g. industry).
As boards and management teams wake up to the opportunity, they realize that
the race is on to capture the full potential of their vertical.
This post is
a framework to help leaders of SaaS companies think through the strategic
choices and hopefully increase the odds of reaching their full potential.Strategy
is implemented by focused alignment of execution, talent, M&A, organizational
structure, functional excellence, and financial and governance/board frameworks.
I hope to write about these supporting pieces over time, but I wanted to start
with strategy first.
Finally, I
think it’s important to acknowledge that very few companies have reached “full
potential,” and this framework is
inherently aspirational. However, “most entrepreneurs aren’t building a house,
they are putting bricks in the foundation of a skyscraper” (Naval Ravikant). Aspiration is important, so
hopefully this is an articulation of what is possible.
This phase
of the SaaS strategy is well understood so I won’t spend much time on it. A
SaaS company aspires to:
build a great product (and service)
over time, build an efficient and repeatable
go-to-market model (marketing -> sales -> onboarding)
and then “add capital” and execution
to press its advantage against sluggish incumbents or poorly capitalized
competitors
This is the
playbook that Omniture and our portfolio company ExactTarget pioneered a decade ago. Despite
massive capital inflows into SaaS and deteriorating economics, this model
generally still works today.
On the product side, scale
in data + AI can create increasing differentiation. For example, when you start
to have more data than anyone else, you can flip your product from being
reactive to proactive — having the product tell users where to look and how to
optimize the system. Both Xero and Shopify have done this well.
Five other things
to think about in this early phase that don’t get enough attention:
Scalable onboarding: Onboarding friction can be unaccounted
drivers of CAC and churn. A great onboarding process builds the trust and
confidence that are the foundations of virality/word of mouth, future cross- as
well as third party channel strategies. Carefully measure funnel metrics and be
attentive to new customer NPS. Automate early as “throwing bodies at it” can
create process debt that will be difficult to unwind later.
Expansion: Expansion drives net revenue
retention and most of the strategies we are about to discuss. With all sales
processes, it’s a lot easier to learn, iterate, and optimize with fewer bodies
and less complexity.
UI and Architecture: Like onboarding, these can be long-lead
time fixes that compound as your business scales and gets more complex. A
specific call out is to plan for an API strategy. It can facilitate future
partner strategies and increase the value and stickiness of your offering.
Pricing structure/strategy: You will constantly revisit tactics,
but it’s important to have some sense of how your pricing structure might change
over time.
Foundations for global, including a work culture that can
support distributed executives and operations, and good product feedback loops that
incorporate non-home market needs.
Hyperscale Locations, Feed
the Beast
A lot of ink
has been spilled on forward investing in sales and marketing, and arguably it’s
part of a/the “lead the category” strategy. But, it’s worth a call out as it’s
important you don’t take your eye off the ball too early. So much of winning and
future monetization is getting location market share. When the wind is at your
back, go get it done! Market structures have a nasty habit of shifting, future
secular tailwinds may abate, or competitors may leapfrog your product or your go-to-market
model. If your churn and sales economics are sound, keep “feeding the beast!”
One
particularly powerful unlock is Channel. There are verticals and
categories, where influencers in a channel are kingmakers and can help you
engage with segments that are otherwise difficult or uneconomical to
reach. Furthermore, Channel partners’
engagement and contributions can enrich your products and increase overall
customer value. A great example is in tax software, where Xero’s wooing of accountants proved to be
an effective source of customers and a formidable competitive moat (thereby
disrupting the incumbent provider). Xero went as far as offering free practice
management tools to help accountants run and grow their business on Xero.
Win the Control Points:
Own Your Vertical
This is
where management teams are faced with a paradox of choice: “Where should we go
next? How should we spend the next incremental dollar? On increasing ARPU, acquiring
incremental locations, or expanding into new verticals, geos or segments?” At
this juncture, it is my belief that you should focus on winning the control points. In vertical SaaS, there are
typically one or two control points, “systems of record.” Usually one control
point in the front office (e.g. Point of Sale, CRM, e-commerce) – “that drives sales,
that grows the business, that serves as the cash register.” And one control
point in the back office (e.g. general ledger) – “where everything else
reconciles to.” Hopefully, you provide one of the systems of record, so go
build or acquire the other system(s) of record and secure the high ground!
Pragmatically,
a system of record is the last software package a customer will “turn off” in a
tough economic time.
I also like
to think about the concept of “gravity”:
Workflow
gravity – the system that all other systems integrate to – it’swhere the most users spend the most time. Not all workflows
deliver the same value; in my experience the system of record workflow tends to
deliver the most value.
Data
gravity – the system that creates and holds the most critical information and is the
hardest to migrate. That data can be critical to a client for a wide range of
applications, from understanding their customers (e.g. CRM) to managing risk
(e.g. compliance). Data also can be critical in two-level situations, such as
loan underwriting (e.g. a bank underwriting a merchant’s risk via POS data) or
supplier information management (e.g. a client managing risk by validating
supplier capabilities and quality). Data depth and scope also create gravity
where AI technologies can be highly productive.
Account
gravity –
the user/sponsor of the system is the highest-ranking individual in the customer
organization; it’s the system that requires the biggest financial outlay, etc.
Winning the
other system of record is not easy. By definition, a system of record is hard
to displace and unless the market is greenfield pen and paper, competition can
be challenging. You may be able to do it organically with product innovation,
but M&A can be the more desirable path if “integration debt” is manageable.
If M&A is not possible, a slow winnowing of your competitor may be the only
approach available to you.
If you own
multiple systems of record in a vertical, the benefits are enormous:
Customer delight: automation from integrated
workflows and potentially unified data and data models allow efficiencies and
offerings unavailable before
Stronger account ownership
to capture incremental spend and drive more efficient growth
A new level of
durability and stickiness
A good example
is Veeva. The company started in 2007 with the launch of a CRM
and a sales automation platform for pharma sales reps (e.g. record their
activity, keep track of the doctors they meet with or drop off samples for, etc.).
After becoming the dominant player in that category, Veeva saw an opportunity
to move backward into research and
development for their life science customers (developing new drugs,
conducting clinical trials and bringing those drugs to market). In 2011 Veeva
launched Vault, a suite of applications that first centered on the core content
management needs for clinical trials, regulatory submissions, and quality
documentation. The company then expanded to include a series of core data
applications that help manage clinical trials, quality processes, safety processes, etc. Veeva is expected to
finish 2019 with $1.1B in revenue (26% YoY Growth) and 37% EBIT margins. Vault
represented 51% of total revenue and grew 38% YoY. Analysts also estimate Vault
meaningfully expanded Veeva’s addressable market.
Another recent
example might be front office player Shopify’s $450M acquisition of 6 River
Systems to move into back office fulfillment and warehouse management. Some
financial analysts estimate that merchants spend up to ~10-15% of their GMV on
logistics which could potentially provide multiples of Shopify’s current take
rate.
Expand Headroom
With
category leadership comes high market share and potentially high saturation. Long-term
growth is driven by location growth, as there’s generally a finite share of
wallet you can access. It’s important to invest in the S-curves of geos,
segments, and adjacent verticals that can unlock new location TAM. This can
take a couple of tries before you’re successful, so start this during your growth
phase when there’s less pressure on maximizing profitability.
Extend Through the Value
Chain
This stage
of growth can be transformative. By leveraging the strengths of your core
customers, you can expand into a new market with a new set of customers. Typical
patterns include moving from front office software to extend to your customer’s
customers, or from back office software and extending to suppliers. These can
be riskier bets, but success can pay out big here:
Increased TAM
Workflow that spans multiple parties and
creates increased customer value and vendor stickiness
Two-level network effects
Supplier
Extension
seems to work best by “following the money” and leveraging purchasing power. TCV
portfolio company Ariba articulated the “golden rule”— He
with the gold rules! By using their leadership in procurement software at large
corporate buyers, Ariba extended to build a robust suppliers software business
for merchants that serviced those corporate buyers. More recently, Avetta has followed a similar path in the
supplier information space by building a strong two-level network effect. We
believe corporate clients want to be on Avetta because it has the largest
network of suppliers, and suppliers want to be on Avetta because it has the
most corporate clients. Avetta’s advantage gets stronger as it scales. Moreover,
Avetta has an opportunity to help suppliers do more than just manage compliance
information. As a result, Avetta sees growth in helping suppliers grow and
operate their business.
CCC is on the third generation of this approach. They started by
serving large auto insurance carriers and then extended into autobody repair shops
that serve the carriers. CCC is now in the process of expanding to parts
suppliers. By getting all the key constituents on its software platform, CCC is
able to leverage AI and automation to massively reduce friction and provide a
great customer experience across all steps of the auto insurance process.
Employee
The employee
opportunity is similar to the supplier opportunity in terms of “following the
money.” Companies can use integrated payroll or time & attendance offerings
to establish a relationship with the employee. Employees are also consumers who
represent significant B2C opportunities such as consumer lending, insurance,
etc. There are big dollars here, but perhaps less opportunity to build significant
network effects.
Consumer
The
consumer/demand opportunity is the white whale. We believe that SaaS companies
tend to capture ~ 50-100bps of GMV for software subscription, whereas online
demand channels can take 15-20% of GMV in categories such as hotels and
restaurants. In addition to the massive revenue opportunity, Consumer also represents a strategic
flank worth monitoring carefully. Online marketplaces have large competing
salesforces that engage with your merchant customers and have strategic
interests encroach on the software layer to try to control supply. Booking.com bought Buuteeq and Hotel Ninjas to
vertically integrate into hotel supply. Uber is rapidly expanding its driver
offering to over-draft protection, a debit card, and likely lending over time
to manage driver churn. This is another example of increasing marketplace + SaaS convergence.
Some
derivative Consumer monetization
models include:
Consumer pay:FareHarbor approaches tour and activity
operators with a free to merchant, consumer pay model: “We’ll build your
website and booking engine for free, with no work on your part; you just pay us
for payment processing and the customer will pay us a booking fee.”
Channel management:SiteMinder offers
channel management to help hotels manage existing channels in real time. SiteMinder
has extended that value proposition to “Demand Plus,” an offering that helps
hotels easily expand into new channels to scale demand.
Existing customers: While 15-20% marketplace take rates may
be sensible for new customer acquisition/discovery, companies such as Olo are looking to move existing
customers to lower cost channels through their dispatch offering while taking a
much lower percentage of GMV.
Customer Co-opt: By seeing consumer data pass through
their systems, some SaaS vendors are building consumer profile databases that
they might monetize over time. In the recruiting market, we’ve seen players
leverage job distribution tools to build a candidate database. Shopify
similarly has built a large shopper profile database across all their
merchants. While Shopify hasn’t monetized directly, the uplift in conversion
rate is likely significant. This model is the most capital efficient but can create
conflicts with the vendor’s core merchant customers.
The biggest
benefit of extending through the value chain is that it gives you a
beachhead and a right to win in a new vertical to start the “full potential”
growth cycle again. As you do this, it’s important to reconsider your end
market and focus. When Ariba transitioned from procurement software to supply
network, they started to represent a front office “system of record” for their
suppliers. In doing so, Ariba was both a large enterprise “procurement company”
and an SMB “supplier enablement company.” The question was: “Which priority
should dominate?” When extension leads to conflicts, there are no easy answers.
As such, it is important to acknowledge that this growth strategy is ever-evolving.
In winning the key control points,
for the same reason a single system of record has a lot of “gravity,”
you now have an even stronger opportunity to turn your product into a channel. This
enables entry into adjacencies with data, workflow, and account ownership
advantages for you as well as for the end customer. The most extreme example is the “platform/ecosystem”
play, where you monetize third party vendors that want access to the channel your
product has become (e.g. Salesforce, Intuit, Shopify). However, most commonly a SaaS
vendor will pursue additional monetization with in-house or white-labeled
products.
Another key
consideration in prioritizing adjacent function/monetization is consistency
with your core go-to-market channel and proximity to key decision makers. Go-to-market
will determine the financial leverage of the cross-sell and often the overall
success. The core advantage of SMB software here is that often the
decision-making is relatively consistent and concentrated across software
purchases.
Every
vertical is different, but there are some common functionality/monetization
patterns emerging. Each of these patterns deserves its own write-up, but for the
sake of brevity here are some highlights:
“Integrated payments -> integrated banking”: The attachment of payments to SaaS has been well covered. That trend is expanding to the attachment of integrated banking. I had an opportunity to interview two of the smartest people in the business, Tim Barash and Jackie Reses. Square is out front here with broad based merchant and consumer plays. To understand the magnitude of the opportunity, Square’s Subscription & Services (most of which are financial services) are expected to reach $1.3B in 2020. This represents 23% of 2020 total GAAP revenue and 47% of 2020 Total Gross Profit (incremental gross profit is ~90%). Brex is earlier in its progression, but we’re excited to see how the company leverages its initial corporate card and expense management offerings to extend into broader financial services.
“Follow the workflow”: At times SaaS companies have
actually observed customers at work or mapped out the physical sites to
understand all the areas their workflow touches as areas of expansion.
“TAM shark”:HashiCorp CEO
David McJannet describes expansion as “TAM Shark,” constantly circling the
biggest, fastest growing (most change/opportunity) markets. He requires product
managers to report on market size and growth of all adjacent categories to make
sure they are focused on the biggest opportunities. Generally, over a 2-3 year
period companies have one, maybe two opportunities to build distinct add-on
businesses. Make sure you’re picking the biggest markets and therefore the
biggest payoffs.
Summary
If the
typical SaaS playbook is “Lead the Category” and “Hyperscale Locations,”
clearly the full potential for vertical SaaS players is dramatically larger
than conventional SaaS wisdom would suggest. We’re excited to work with — and
hopefully invest in —the frontier players as they explore the “Full Potential
of SaaS.”
If you found
this useful, let me know, and we’ll continue to publish and explore the topic. I
look forward to hearing your adds, edits, and challenges.
Caveats
There’s a tension between aggregating
as big a profit pool as quickly as possible vs. “winning the market.”
This framework is characterized as a sequential
strategy. In reality, most companies are pursuing multiple steps concurrently,
and the sequence is more a reflection of prioritization.
Time horizon: this approach is a long-term
strategy to winning, which may often be at odds with short-term maximization of
valuation multiple and financial performance.
This approach is informed by a U.S./western/mature
approach. In emerging/more greenfield markets, less focus and value chain
expansion earlier in company development may make sense.
The
views and opinions expressed are those of the authors and do not necessarily
reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not
verified the accuracy of any statements by the authors 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 document, please see “Informational
Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.
[1] See TCV’s SMB and Vertical SaaS investments at the end of the document.
Board
members can bring a wealth of experience and advice to their CEOs – and not
just when the board convenes each quarter. The chemistry of this critical
relationship requires careful attention, particularly when selecting and
onboarding new directors, coaching the team and providing diverse insights. Tayloe
Stansbury, Venture Partner at TCV, shares lessons and insights from his board
memberships and two decades reporting to corporate boards as CTO at Intuit, CIO
at VMware, and EVP at Ariba. Beth Knuppel, Principal in TCV’s Portfolio Operations,
guides the conversation to the key moments and processes that board members and
CEOs need to master so that their relationships – and the business – can
thrive.
In this
podcast, Beth and Tayloe address practical questions for anyone coming onto a
board or running a company with board support, such as:
The most important criteria for joining a board
How to maintain diversity of opinion on the board while
still providing the CEO with convergent advice
Why board members should meet with their CEO informally
between board meetings
How to set efficient board meeting agendas that allow for
in-depth discussion of pressing issues
Why board members should evaluate their own performance
and not just the CEO’s
For this and more, settle back and click play.
TRANSCRIPT
Beth Knuppel: Welcome to Growth Journeys. This is a
podcast series from TCV focused on lessons from the field from both operators
and entrepreneurs in the TCV ecosystem. I’m Beth Knuppel. I’m an Operating Principal
at TCV, where I lead our talent center of excellence within portfolio
operations. Our podcast today is all about the CEO board partnership and
lessons learned for effective governance. I’m joined today by Tayloe Stansbury.
Tayloe is a Venture Partner at TCV, where he works with existing portfolio
companies, and he’s also involved in diligence for potential investments. In
addition, Tayloe serves on the board of directors at Coupa Software and
BlueJeans. Welcome to Growth Journeys, Tayloe.
Tayloe Stansbury: Thank you very much. It’s great to
be here.
Beth Knuppel: So, Tayloe, you had a long, successful
corporate career before joining TCV as a venture partner. Most recently you
were CTO at Intuit. Tell me a little bit about your background and how you got
to this point.
Tayloe Stansbury: For the last decade, I was CTO at
Intuit. I looked after all their technology operations — so engineering, data
AI, IT, and information security. And before that, I worked at a number of
other companies, including Ariba. I was EVP of product and operations there,
which included customer support, product management, engineering, and
operations. I worked also at VMware, Calico, Xerox, Sun, and Borland in a
variety of different engineering and general management positions.
Beth Knuppel: So you are a technology veteran, for
sure?
Tayloe Stansbury: I guess.
Beth Knuppel: In addition to those roles, I mentioned
you also serve in some board of director roles. You were on the board of
Shutterfly for three years. You continue to serve on the board at Coupa and at
BlueJeans. What was it that attracted you to board service in the first place?
Tayloe Stansbury: I was a direct report to CEOs of
public companies for some 20 years, which meant that most every quarter I was
doing presentations to boards. And it started to intrigue me that maybe I could
contribute at a different level. And that’s what led me to getting onto my
first board.
Beth Knuppel: When you say at a different level, tell
me more about what that means to you. What is it that a good board really adds
to a company?
Tayloe Stansbury: Boards advise, right? Boards don’t
manage. Management manages. And I think that distinction is really important.
Boards bring a wealth of experience that is orthogonal to what some of the
managers have and can advise them on new situations that arise and how to think
about new problems.
Beth Knuppel: I think that a lot of people have in
their mind this outdated stereotype of the board member who sort of jets in,
goes to dinner, maybe makes a few pithy comments at the meeting the next day,
and then you don’t hear from them again for another quarter. I should say, that
is definitely not the model at TCV. Our boards are really engaged. But I’m
curious, what would a management team expect, or what should they expect, in
terms of engagement in between those quarterly board meetings? How do you work
with the board in between those formal opportunities?
Tayloe Stansbury: For myself, I’d say, I generally
meet with the CEO of each of the boards that I’m on once in between each board
meeting — go out to dinner, to breakfast, or something like that — and just
talk about whatever’s on their mind. And I usually adopt one or two, sometimes
three members of the senior management team that I coach. And I usually meet
with them once off-cycle between board meetings. And those meetings can be a
lot of fun, high engagement.
Beth Knuppel: Got it. You know, a lot of our audience
are founders who may not have ever worked with a board before. So you’re
talking about this engagement in between. Who’s initiating that? Is that you,
on the board? How should the CEO be reaching out?
Tayloe Stansbury: I think it’s best always if the CEO
is making the introductions so you’re not invading their space and having
meetings unbeknownst to the CEO. I’d give an example from a board I was on that
was for a college. And the president asked me if I would lead the advancement
committee, which means fundraising. And I said, “Hey, I’ll do anything for
you, but I know nothing about fundraising.” And she said, “You’ll
figure it out,” and turned around and then walked away. So she did
actually introduce me to the head of fundraising and, we had a very fruitful
relationship, where I would come down before each of the board meetings and go
over his management challenges, his prioritization challenges, and how it is
that he was going to present to the board, because while he was very
experienced in fundraising and I was not, I knew something about presenting to
boards and he didn’t. And so it would end up being a very fruitful relationship
and we blew through all our targets and it was great.
Beth Knuppel: That’s great. One of the sayings that
we have here at TCV is that the journey to the top is never a straight line,
right? Every organization experiences setbacks and challenges. But I’m
wondering, the CEO is typically looking to put their best foot forward with the
board. How should a CEO balance that? How should they bring bad news or maybe
challenging situations to the attention of their board?
Tayloe Stansbury: If all you’re doing is the
Pollyanna version, nobody learns anything. I think what’s really best is
approaching it with complete transparency and an attitude of seeking counsel,
because that’s when you get the true value out of a board member who may have
been through some of these things, or have cognated things before. So that’s
hard to do. It means you’ve got to show your dirty laundry. But over time, you
can build a relationship with a board where that’s okay, because they’ve had
dirty laundry in managing the things that they did earlier in their lives as
well. And they’re not going to be freaked out about it, and they’ll be able to
give you much better advice which will enable you to perform better over time,
with the transparency.
Beth Knuppel: It sounds like a key piece of that is
just developing trust.
Tayloe Stansbury: Absolutely.
Beth Knuppel: How do you think about doing that when
you’ve joined a new board and you’re establishing your own relationships with
the other board members, with the CEO? How do you think about your entry into
that board?
Tayloe Stansbury: Well, I think you’re hitting on a
really important issue which is that the relationships are really important.
And I think boards work best when there’s diversity of thought, everybody is
respectful of each other’s opinions, but they’re also able to converge towards
something which is a plan of action or a consistent set of advice for the
management team. And I think the same thing is true with management. There has
to be that trust of each other, the sense that different people are bringing
something different to the party that is worth listening to and every now and
then might be the key thing you need to know to manage through a tough
situation. Mechanically, how that would work is going out to dinner with these
people off-cycle from regular board meetings, getting to know them, and getting
to build up that level of trust and respect for what it is that they’ve done.
Beth Knuppel: Right. I’m curious. As you work with a
CEO, you want to build that trusted relationship, but at the end of the day, as
a member of the board, part of your job is to evaluate the performance of the
CEO.
Tayloe Stansbury: That’s right.
Beth Knuppel: How do you work through CEO evaluation?
Tayloe Stansbury: I think it’s best practice to have
an annual evaluation of the CEO and actually even an annual evaluation of the
other board members, where you think about: “What are the objectives that were
set for the company, what are the objectives that the CEO may have set?” And
everybody actually scores the CEO on that. You have a discussion as a board,
and that gets presented to the CEO on an annual basis. And that discussion
precedes setting the compensation for the CEO for the following year. I think that
detachment where you can help and also provide some evaluation — hopefully
which has got constructive ideas as to how the CEO can improve in areas where
perhaps they need to grow.
Beth Knuppel: And you mentioned that you think it’s
good hygiene for the board to engage in some self-reflection as well.
Tayloe Stansbury: Yes.
Beth Knuppel: How does that process work?
Tayloe Stansbury: Same way. Score each other, get
together to have a couple-hour discussion about what came out in the survey.
And if it’s a board that has mutual respect, those kinds of comments can end up
helping bring the board closer together and help smooth out some rough spots.
Beth Knuppel: In the case of, maybe, a board that’s
underperforming, what are some of the things that in the past you’ve
encountered that help address an underperforming board?
Tayloe Stansbury: I see it as a spectrum – where at
one end of the spectrum, you have a rubber-stamp board that’s not really
providing any meaningful thought diversity to the problem, and the other end,
where you have an acrimonious board which can’t agree on anything and they’re
just fighting over stuff. And I think the sweet spot is somewhere in the
middle, where everybody is thoughtful, they’re presenting diverse points of
view, and they’re figuring out how to converge that into something that is
constructive for the management team. And how do you get there? Again, I think
it’s by spending time with each other and learning to appreciate what each
other’s gifts are, what each other’s experiences are, what their scars are that
they’ve managed to live through and learn things from. On a rare occasion, it
may be best if some people move off the board if they just can’t get aligned
with the rest of the team.
Beth Knuppel: Are there any common pitfalls that you
see?
Tayloe Stansbury: In one case in particular, we did
have a board that was pretty acrimonious and couldn’t get on the same page and
it was very hard to get anything done. It was very hard to give consistent
advice to the president of that organization. What happened in the end is some
of the people who were really on a different page rolled off. And we got down
to a set of people not who were rubber-stamped, who had diverse points of view
but were able to come together in the end.
Beth Knuppel: I know at Coupa, you’re a member of the
nominating and governance committee. What is it that you think about when
you’re evaluating somebody who might potentially join the board? For CEOs out
there, what should they be looking for when they’re thinking about board
composition?
Tayloe Stansbury: We look at: “What is the skill set?”
We have a whole matrix for skill sets that would be desirable for the board,
and we score each other on how strong we think we are on those things. And that
leaves it clear where there are some areas where we may have some gaps, some
skills gaps — some experience gaps — that it would be really nice to flesh
the board out with. And so then you go and say, “Well, who would be the
people who could best fill those skill or experience gaps?” And then you
look for, “Who are the people who are going to work well with the rest of
the board, whose voices will be heard, who will hear other people’s voices, and
will actually be convergent in their thinking, over time.”
Beth Knuppel: And, of course, the other side of the
coin, as you’ve joined boards, you’re also making an evaluation. What is it
that you look for to figure out whether a board is a good fit or not?
Tayloe Stansbury: The first thing is, you’ve got to
have a passion for the business. If it isn’t a business that you love, then you
probably shouldn’t be taking up space on the board. Another thing I really want
is to have a visceral sense of what is the strategic path to success for this
organization. So how is it that they’re going to weather whatever competitive
threats and come out on top? Your sense of that may change over time, but I
think you have to go in with a pretty good hypothesis of how this organization
can become durable and win against the invariable competition. And the last
thing is, it’s got to be people I like, because you’re going to be working with
these people over several years. And you’re going to have to come to converged
advice for management. It helps if you like everybody who’s involved.
Beth Knuppel: Sure. I’m curious to get your
perspective on bringing on a new board member. Is there anything that you’ve
experienced personally, or you’ve seen done really well, in terms of onboarding
somebody onto the board?
Tayloe Stansbury: I think that bringing on a new
board member is a big deal, and if you just hand them a board book and say,
“Show up for the next meeting,” they’re going to come in without a
lot of context, and they’re going to feel a little bit not on the inside, and
their questions are just going to be off-kilter. And what I’ve seen as a best
practice is you invest several hours, like a day, in training a new board
member by having them meet with some of the senior management people,
one-to-one, and then also go through a full rundown on the products, including
demos of the products, so they have a real feel for the business and the
competitive space.
Beth Knuppel: I’d love to get your perspective on how
you think about the board agenda, and what topics are actually covered. Board
time is so precious, you want to make sure that you’ve got a thoughtfully
constructed agenda. What, in your view, rises to the level of importance for a
board meeting?
Tayloe Stansbury: One thing I’ve seen that doesn’t
really work really well for board agendas is to try to have every key member of
the senior leadership team talk about the progress in their area every single
board meeting. What I have found works a lot, lot better is if you look at the
board calendar over the course of a year and say, “How do we make sure
that every function gets their day in court, if you will, with the board, over
the course of a year rather than the course of a single meeting?” And
everybody can have a deeper discussion, and you get into the meatier stuff. Now, to complement that, I think
having board materials that are first-rate, that come out early enough so that
all the board members have a chance to read and digest them, is really
important.
And what you
can do in the board materials is make sure that the board materials include
some news about what’s happening in every function that has something to report
— even if they’re not going to present — so the board gets a view of that as
it’s happening but then gets the deeper-dive discussions.
Beth Knuppel: Great. When I was presenting to boards
on a regular basis, one of the things my CEO always said was, “Be bright,
be brief, be gone.” In other words, do whatever you need to, to avoid the
dreaded page flip where it’s kind of a march through slides that hopefully the
board has already read. Is there anything you would share with folks who are in
that spot of presenting to the board?
Tayloe Stansbury: I think it’s important for
presenters to realize that the board has read the materials in advance and say
the things only that punch up the most important parts of what’s on the pages.
I think another good practice is you may think that you’re going to have an
hour to present or half an hour to present, and it may be that the schedule
goes sideways and you end up with only 5 or 10 minutes to present. It’s always
good to have the 5-minute version of your presentation in the back of your mind
so if you’re asked to do that, you can say something intelligent and helpful
during whatever time remains. An important thing to remember about board
members is they come and engage only periodically in the business. You, as an
operating leader, are in there every single day. The board member isn’t going
to remember all the context that you’ve got in your brain, and they’re not
going to remember the thing that you told them three months ago. So making sure
that you show not current state, but trajectory over what’s happened before,
can help make sense for the board member.
Beth Knuppel: Great. Good advice. I want to close out
with two questions. And first, I’m curious, if you look back over your board
service, what do you think is the biggest learning that you’ve taken away? What
is it that you would do differently the next time you join a board?
Tayloe Stansbury: You know, I think that getting to a
sense of flow with a board, where you’ve got good ideas that are coming in,
people bringing diverse thoughts, and where people are thoughtful about that
and get to a good place quickly in terms of advising management, those are the
boards that feel really good. The ones where you have people who are on a
different place of, “Hey, I’m excited about this company,” and others
who are thinking, “We ought to sell this company,” and you just can’t
get them together, those end up being pretty rough situations. And you want to
avoid the latter, if you can.
Beth Knuppel: Finally, for founders, for management
teams who might be listening, what would you say would be the key takeaway that
you would offer them for, really, how do you build and leverage an effective
board?
Tayloe Stansbury: Look for openness and trust. Build
a board where that exists. And working together, you can actually be a lot
smarter than you can individually.
Beth Knuppel: Absolutely. Great insights, Tayloe.
Thank you so much for joining us today.
Tayloe Stansbury: Thank you so much.
###
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/.
TCV is delighted to announce that Gopi Vaddi, a seasoned investor with broad international experience, has joined the firm as a General Partner. Founded in 1995, TCV has invested over $13 billion in more than 350 consumer and enterprise technology companies, including $2 billion in Europe, where Gopi will be focused. TCV investments in Europe include Believe, FlixMobility, Brillen.de, RELEX Solutions, RMS, Sitecore, Sportradar, Spotify, The Pracuj Group, and WorldRemit.
Gopi is an excellent fit with TCV’s long-term strategy and
focus of investing across geographies and domains, often far from major
technology and financial hubs. He was born and raised in India, took degrees in
business administration and electrical engineering in the U.S. and India, and
has experience investing in the U.S., Europe, and Asia. Most recently, he was a
partner at Providence Equity’s growth fund, where he worked on growth buyouts
and minority investments in software and payments. At TCV, Gopi will focus on
software and software-enabled businesses covering business applications, vertical
software, digital marketplaces, and infrastructure software.
“We take as much care in adding a new partner as we do in making a new investment,” said Jake Reynolds, General Partner at TCV. “Gopi’s success springs from the same qualities that have driven TCV for nearly a quarter-century: deep domain knowledge, keen market insight, and a passionate commitment to helping entrepreneurs achieve category leadership. He also complements the firm’s broad growth-biased investment approach with expertise in software buyouts and buy-and-build investing.”
Gopi understands TCV’s approach, just as we recognize the value he has brought to his investments, including a willingness to roll up his sleeves and work side by side with management. As a citizen of the world who started his career as an engineer and data modeler, he has an innate ability to identify and partner with the next generation of category leaders and the entrepreneurs steering them.
We are thrilled to welcome Gopi to the team.
The General Partners of TCV
***
The
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/portfolio-list/. For additional important disclaimers regarding this post,
please see “Informational Purposes Only” in the Terms of Use for TCV’s website.
Compliance seems to divide enterprises into three categories: those that primarily publicize it as proof of “good governance,” those that actually push the boundaries far enough to bring consequences, and everyone else with their heads down, trying to address whatever regulatory standards govern their industry and the seemingly ever-changing nature of those standards.
Now a
fourth group is emerging, charting their own course. These enterprises are
turning compliance to their advantage by mining compliance data for digital
gold: insights that increase efficiency and competitive advantage. Like the
governance crowd, they have automated many compliance functions with emerging software
solutions. They are looking at the resulting data with fresh eyes and using it
to improve their businesses.
More
Regulation…
Most
people think of compliance in terms of rules and regulations imposed by lawmakers
and other governing bodies, for good reason: there is a proliferation not just
of new regulations but of whole new regulatory frameworks such as Dodd-Frank
and GDPR. Even long-time frameworks such as SOX, HIPAA, and FCPA continue to
evolve. Yet at the same time, many enterprises are setting rules of their own
to address an increasingly complex environment that includes global supply
chains, cybercrime, trade wars, Brexit, and other evolving risks.
In the
end, it doesn’t matter where the rules come from: compliance, and the
documentation that comes along with it, is essential for managing risks and
maintaining brand reputation. The roster of damaged brands from just the past
few years illustrates what can happen when risk and compliance management break
down.
Until
recently, enterprises managed compliance risks with home-grown, often siloed and
disparate initiatives that focused on people and processes. The components
included manual record-keeping, time-consuming audits, constant training,
ever-lengthier supplier questionnaires, C-level compliance positions, and
board-level reporting. The reams of information gathered and presented were
considered useful mainly for answering a simple question: Are we compliant or
not?
Then a new
question arose: Can we at least automate and digitize risk and compliance data,
like we have done with so many other processes? The answer to that question is
clear: We can, thanks to a growing community of companies providing governance,
risk, and compliance (GRC) technology solutions that automate the process of
collecting, aggregating, analyzing, and presenting relevant data while reducing
their costs to the organization.
…Meets
Smarter Compliance
We believe
that just as homegrown compliance structures created the opportunity for
digitization, a critical mass of companies are now positioned for a new
opportunity that may eclipse the earlier one. Data that was once viewed merely as fuel for the compliance machine
can now be considered a strategic output in its own right, with value to the
business beyond compliance.
Whether
it’s a bank mining Know Your Customer data to pitch targeted travel insurance
to its customers or a CPG manufacturer analyzing complaint data from the Consumer
Financial Protection Bureau to improve its manufacturing methods, we see an
opportunity for companies to extract incremental, “offensive” business insight
from large risk, compliance, and regulatory data sets.
Why
Now?
This
opportunity represents a convergence of what may seem unrelated factors. But
let’s remember that in a globalized, highly competitive economy there are few
trends that arise in isolation.
The first
trend we note is a dramatic change in the people sitting in the chief
compliance officer (CCO) chair. Russell Reynolds
Associates analyzed
the career backgrounds of 72 CCOs in banking, insurance and asset
management and reported that “gone are the days of principally legal and
compliance executives nabbing the top job in the compliance function.” So who’s
getting the job instead? According to the report, it’s “broader-focused appointees
from consulting, risk and audit. This new breed of appointees would be
well-positioned to contextualize compliance (and the associated cultural
change) in the wider picture of the organization.” In other words, compliance executive leadership is not just for
lawyers and specialists – it’s for multidisciplinary executives who are as
fluent with brand value and enterprise risk as they are with the P&L and
operations.
The second trend we note is increased use of AI/ML.
The transportation sector is a leading example, in part because it is heavily
regulated. Shipping companies, notably UPS, now place dozens of monitors on
their vehicles for compliance with internal and regulatory rules – and then
apply AI to the monitor data to optimize delivery routes and driver behaviors
in ways that squeeze out fuel costs and improve customer satisfaction. Fleet
operators are further served by solutions from the likes of Keep Truckin,
Samsara, and Geotab, which help improve driver safety and increase the
precision of preventive maintenance.
The third trend is the evolving
consumer privacy landscape. Ironically, more robust data protection and
security regulations such as GDPR can actually serve to enhance business value
by increasing the trust between companies and their customers. In its January
2018 report, “How
GDPR is an Opportunity to Create Business Value”,
Gartner notes that “handled effectively, there is great potential to obtain
consent to increase data access, use, and sharing rights — aligned with goals
of a wider organizational data and analytics strategy. This can help drive
competitive advantage, while also helping to achieve compliance in other
countries and regions.”
Examples of Leveraging Risk &
Compliance Data to Drive Business Value
These are
examples of companies that are helping advance the use of risk and compliance
data for improving everything from customer experiences to supply chain
performance to more effective emergency response:
Avetta’s
customers use Avetta to certify compliance quality of its suppliers (green
flag, yellow flag, red flag) and then mine the data to identify which suppliers
are best trained and best equipped for certain on-site jobs.
Higher education institutions have long collected
data to achieve and maintain external accreditation. Watermark Insights helps universities and colleges not only
collect, digitize, and report on that data to demonstrate effectiveness, but
also to use it to inform curricular changes and improve student outcomes.
AxiomSL’s financial services clients utilize its data integrity and control platform and
its risk calculation and reporting solutions to satisfy regulatory requirements
across the globe systematically. With
trusted data, banks are now also able
to identify opportunities to fine-tune capital/credit risk and deliver
compelling business insights across the enterprise.
Global
Trade Management solutions from the likes of Descartes and Amber Road (now a part of E2OPEN) have long been used to satisfy mandatory export
compliance obligations (e.g. restricted party screenings) and to remain abreast
of regional duty programs and tariffs. But by marrying these regulatory
datasets with companies’ more “traditional” supply chain data (such as bill of
materials and transportation fees), clients are now able to more accurately forecast
true landed costs (the total price of
the shipment including customs, duties, taxes, tariffs, etc.), all the while
minimizing risks and delays.
Rave Mobile Safety enables schools to automate collection of and access to critical facility
information (e.g., floor plans, alarm information), which they need to remain
compliant with fire department ordinances – and it also provide 911 dispatchers
and first responders better real-time capabilities when emergencies arise.
Information
governance and eDiscovery vendor Nuix is well known for its deep
technical capabilities in high speed processing and analytics around vast data
sets, typically in the context of litigation and investigations. But enterprise clients are also able to
leverage the platform to create “data lakes”, making data more accessible for
re-use in future investigations, litigations and data management programs,
helping reduce costs.
Biopharma companies rely on software
from ETQ for much more than compliance with FDA requirements; they also
leverage the data to mitigate and prevent high-risk events, scale operations
more effectively, and streamline their go-to-market activities.
There are many other examples of organizations across
industries utilizing technology from GRC vendors to not only achieve their risk
and compliance objectives, but also advance their strategic objectives. The trend is still very much in its early
days, but it provides an exciting avenue for continued growth in the
sector. As an experienced technology
focused growth equity firm, TCV is committed to investing in the category
innovators in the GRC space and has invested in such companies as Avalara,
AxiomSL, Avetta, LegalZoom, Rave Mobile Safety, RiskMetrics Group, and
Watermark Insights.
***
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/.
Part 2: Aligning HR with Technology and Data / Planning for Acquisitions
Beth
Grous, Chief People Officer for TripAdvisor,
is applying the same strategy to HR and strategic talent management that TripAdvisor
utilized to become the world’s top
travel site: leverage new technology and approaches to gain insights that drive
decisions and positive business outcomes. In Beth’s case, that includes
everything from recruiting and retaining employees to increasing equity,
diversity and inclusion. In this second part of a two-part conversation, Beth
talks with TCV General
Partner Nari
Ansari about the many ways this approach is benefiting both TripAdvisor
and its people. Examples include informing business strategy with direct
feedback from employees, using smarter benefits and training to retain
employees, building a more diverse talent pipeline, and how her team plans for
acquisitions so that people management operates effectively during and after
integration.
***
Nari Ansari: Beth, thanks for joining us again to discuss
TripAdvisor and your talent and people operations journey. We previously talked
about aligning
HR with business strategy, and jumping back in, I’d love to hear a little
bit more about how TripAdvisor is using technology and data in HR operations.
Beth Grous: Great question, and I can give you some relevant
examples across different areas.
Let’s start with employee development. We want to use
technology to think about learning differently and less traditionally, and we
want to meet the workforce where they are. As one example, we recently began
piloting Audible for Business. Employees like to get training delivered to them
during their commute or during their downtime; it’s a different approach to
content delivery than classroom learning, and one which our employees have
embraced.
Additionally, we seek employee feedback as a key input to
how we build and evolve our people programs. We do everything from surveys to
monitoring Glassdoor to, and it sounds overly simple, but just talking to
people. As much as I love tools and technology, you’d be surprised at how much
you learn if you just ask people what’s going on … they’ll generally tell you.
And we are increasingly looking to data to help us think about our people in
more detailed ways. Let’s use the turnover example. You’re never going to get
it to zero attrition, so it’s really about slowing that path to exit and
increasing engagement.
One of the recent data-driven insights we had is around the
leave of absence journey. When an employee goes out and then returns from leave
of absence—particularly one taken to welcome a child into the family—they enter
a meaningful period from a retention standpoint. It doesn’t matter whether the
employee is the birth parent or not. Our data indicated that one of the most
important factors in determining retention during this period was the
employee’s relationship with their manager; do they feel supported as they
leave and return? So with this
understanding, this past year, we did two things. We increased our benefit
level around leaves in general, expanding our leave policies to include a paid
caregiver leave: 8 weeks fully paid for caring for a newborn, caring for an ailing
family member or elderly parent. For birth moms, who also get an additional 8
weeks of short-term disability pay, this brought our full maternity benefit to
16 weeks; non-birth parents get 8 weeks. We also coupled our leave enhancements
with improved manager training. The data gave us insights that if our managers
aren’t paying close attention to that transition, your likelihood of losing
someone just after a leave of absence increases significantly.
Nari Ansari: Clearly some impactful examples with regards
to the use of data to inform your people strategy. Are there any other areas
where you have experimented with the use of data to make people-based
decisions?
Beth Grous: We’re in stage one—the early phase—of our
overall people analytics journey, but I believe we are starting in a very good
place. We have robust systems, including Workday and Greenhouse, to capture
data. With 3500+ employees, we have scale, which provides a lot of data points.
So we’ve got a good basis to work from.
We’re actively thinking about data and analytics and how we
apply it to the workplace. Within talent acquisition, we monitor a number of
key metrics: How many days does it take us to fill jobs? Where are the pinch
points in the various recruiting stages and how can we speed throughput for
candidates? I expect that in the future we’re going to be even more intensive
about how we aggregate all the signals, both active and passive, around some
interesting analytics. I think we’ve barely scratched the surface here. And
that’s really exciting.
Nari Ansari: I
think certainly the world is recognizing that business is going to be intensely
data-driven, and on the people management and HR side it’s very much heading in
that direction as well. As we continue to shift from a manufacturing economy to
a knowledge economy, many would argue that people are a corporation’s most
important asset.
Beth Grous: I
couldn’t agree more.
Nari Ansari: Along the lines of employees as a critical
asset, one of the things we are also seeing many tech companies grapple with is
how to make workforces more diverse. I know at TripAdvisor you have an equity
diversity and inclusion department with a responsibility in this arena. Perhaps
you can shed light on that department’s role and your organization’s journey.
Beth Grous: It’s an important topic and something
many companies are grappling with. My personal macro view is that individual
companies need to do much more, but that said, this is not a one-company solve
for one-company problem or opportunity. This is an ecosystem opportunity. I
think about not just building diverse and inclusive teams here at TripAdvisor
but building diverse and inclusive skill sets that help the greater employment
ecosystem. I had a new dad tell me recently how grateful he was for our eight
fully paid weeks of caregiver leave, because it allowed his working wife to go
back to work at her company, and not have to worry about finding a nanny, childcare center, or a relative to help for
those first several weeks she was back to work, because her spouse was able to
be home with the baby — because of our benefits. I was excited to hear that
our benefit had eased the transition to motherhood for a woman working in
another organization. It is important
that all companies — sort of like all boats — rise together.
When we built and crystallized our organizational values
back in 2016, one of the values we were explicit on is “We’re Better Together.”
We then built a small team in the end of 2016 to focus on equity diversity and
inclusion or what we call “ED+I.” In 2018, we looked at the demographics of our
workforce, to be clear on our starting point. We asked our workforce what their
experience here has been around the topics of equity, inclusion, diversity and
belonging to really understand how people are experiencing our workplace. And that
information helped inform our initial approach.
Over the last year, one of our insights was that we needed
to focus even more purposefully on talent acquisition, which meant providing
our recruiting team and our hiring managers with better tools and training
around sourcing and recruitment delivery, and around building a diverse
pipeline. You can’t have a more diverse
organization if you don’t bring more diverse people into the pipeline. And once
they get here, they have to experience an authentic sense of belonging. It’s so
obvious, right? And you can’t build a diverse pipeline unless you’re really
paying deliberate attention to the talent acquisition process.
Nari Ansari: That
makes sense. And it ties back to our point earlier, that people are the most
important asset in companies. When you do an acquisition, it’s a talent
acquisition, not just the IP or
the customer base. The people are a huge part of it. Most of our portfolio
companies do augment their organic growth with inorganic growth as part of
their strategy, and these acquisitions can introduce a lot of complexity and
challenges from a people management standpoint. What role have you and your HR
organization played as you think about strategizing around and integrating
these various acquisitions, particularly the ones that are global in nature and
may have additional unique complexities as a result?
Beth Grous: We recently acquired Restorando in South
America and Bokun in Iceland. Both are companies with teams that are not
located near any other TripAdvisor office. I mention this because it’s often easier
to integrate acquisitions if you have a local presence in that market already,
or a leader from the new parent company who joins the newly acquired team. When
organizations do that, people on the acquisition side can see and understand
what the parent company is about, through that leader. You have to think about
it a bit differently when you’re totally remote from the center or other
offices. Our business leaders, for sure, recognize that having a successful
integration and change management strategy materially increases the likelihood
of that acquisition being successful. So, therefore, the HR teams or people
operations teams are very involved in the pre-acquisition planning. We invest a
fair amount of time in that upfront planning, and I’m diligent about making
sure that people have well-thought out, detailed project plans so that at the
appropriate time, you can just enter execution mode and go from there. How do
we think about organizational structure? How do we think about Day One change
management and culture integration? How much of the TripAdvisor fabric do we
superimpose on this acquisition, and how much of the local culture should
continue to exist? I think it’s always a really healthy balance of those two
things. An acquisition can be both a thrilling and terrifying time for people.
There are many unknowns and a lot of uncertainty. Part of what we try to do is
bring that human element to the forefront and recognize change management and
communication are vital parts of that journey.
We’ve started to develop a bit of a muscle around
acquisition integration. And again, when we’re buying a company, we’re often as
excited about the employees and what they bring to the whole of TripAdvisor as
we are about the customer base or the part of the industry that they’re in.
We’re thrilled to be welcoming these folks to the family, so we try to make it
as seamless as possible.
Nari Ansari: Right. I’m glad you used that term,
“muscle,” because it’s certainly a term that we think about a lot as we work
with our portfolio companies. We also compare conducting acquisitions to
building a muscle, and like any muscle, it’s developed and honed over time,
through practice and exercise. And I think you get better with each one.
TripAdvsior has certainly done enough where you’re seeing pattern recognition and
have enhanced your approach on the people side, to ensure things go as smoothly
as possible and you get all the good positive impacts you want on the other
end.
Beth, my last question is a little more open, because of
where you sit at the intersection of technology, people management, consumer
internet, and international growth. You see a lot. What else in the world of
tech outside of TripAdvisor gets you excited? What are you watching and
thinking about in the tech world more broadly?
Beth Grous: Good question. First, I think technology
is improving and becoming more integrated into people’s lives. Five years ago,
if you had told me that people would be comfortable booking an expensive trip
on their little, slow mobile phone, I would have probably raised a bit of a
skeptical eyebrow. That was a big transaction to do in that way. And now, we
see this happening all the time with our customers. Consumer habits and
technology have shifted.
Personally, I’m very excited about the level of innovation
in HR technology across the spectrum, whether that means delivering benefits in
a different way, new data and analytics approaches, thinking about various
talent acquisition strategies, or how we use technology to help us end up with
more diverse workforces. The new technology solutions that I see today are very
exciting to me as an HR practitioner. I do think that technology will continue to
transform the work of HR and it’s going to have a net positive impact on
organizations, which is energizing.
Nari Ansari: As
someone who invests in HR technology, I definitely see more interesting things
and innovative approaches than in years and decades past. So, lots to be
excited about.
Beth Grous: The
last thing I’ll add, and I say it to people all the time, I am so lucky to have
the opportunity to do this work in this company. It’s really fun. I’ve got a
great team and work with a great team of executives. And for that, I’m very
grateful.
Nari Ansari: That’s great to hear. We are very proud
to have TripAdvisor in the TCV portfolio. Thanks so much for sharing your
thoughts with us.
Beth Grous: My pleasure!
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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/.
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.
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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.
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
TEMECULA, Calif., Aug. 12, 2019 (GLOBE NEWSWIRE) — Perceptyx, the employee survey and people analytics platform that helps companies transform the way they leverage their people data to drive business success, today announced it has received a significant investment from TCV, one of the largest growth equity firms backing public and private technology companies. The investment and expertise from TCV will help fuel Perceptyx’s rapid growth through product innovations for current and future customers, positioning the company to build upon its market-leading people analytics platform. As part of this investment, Nari Ansari (General Partner, TCV) and Dave Eichler (Vice President, TCV) will join the Perceptyx Board of Directors.
Founded in 2003, Perceptyx provides deep insights into an organization’s people, giving leaders the data and insight they need to improve the employee experience, predict challenges in the business, and drive strategic action to deliver improved business performance.
“This is an exciting moment in Perceptyx’s history. For over 16 years we have been on a mission to help people and organizations thrive, and the partnership with TCV is evidence of the value that our customers continue to derive from our platform,” said John Borland, CEO of Perceptyx. “TCV has a history of investing in category-redefining companies, and their partnership reaffirms our culture of innovation, off-the-charts customer retention, and the increasing demand for a more integrated approach to talent analytics in driving business strategy and operations.”
Advancements in machine learning and the growing volume and availability of business and people data continue to fuel increased demand for deeper talent insights that enable Human Resources (HR) to be more strategic partners to the business. While the global Human Capital Management (HCM) market size is expected to reach US$22.6 billion by the end of 2025 (a 7.6% CAGR), the 2018-2019 Sierra-Cedar HR Systems Survey found that 41% of CHROs plan to increase spending on Talent Analytics in particular, further indicating that the Talent Analytics market is heating up.
“Perceptyx’s history of building a best-in-class product as well as their strong customer focus has the team well positioned to capitalize on the enormous and growing opportunity within the HCM space. We are very excited to partner with the Perceptyx team to help them reach their full potential,” said Dave Eichler, Vice President at TCV.
Since TCV’s inception in 1995, the firm has raised over $15 billion across ten funds and invested over $12 billion in leading technology companies. TCV investments include notable franchises such as Netflix, Facebook, Expedia, Spotify, Airbnb, Peloton, Splunk, and Zillow – and they have partnered with leading cloud / SaaS software companies, such as Avalara, ExactTarget, Alarm.com, HireVue, GoDaddy, Twilio, Toast, Webroot, and Xero.
“TCV partners with companies we believe are leaders within their market vertical,” said Nari Ansari, General Partner at TCV. “We have been watching Perceptyx closely for quite some time and have been impressed with their consistent growth and amazing track record within the Fortune 1000. We look forward to supporting the team as they embark on their next phase of growth.”
The investment from TCV is particularly significant for Perceptyx in that it represents the first external investment since its founding in 2003. Entirely self-funded and profitable from its inception, Perceptyx has fueled its own growth through a relentless focus on product innovation and client satisfaction, achieving greater than 95% client retention. As the people analytics provider to over 30% of the Fortune 100, experiencing accelerated growth, Perceptyx is poised to further its growth and expansion through the partnership.
About Perceptyx Since its founding in 2003, Perceptyx has been revolutionizing the employee survey and people analytics industry, delivering enterprise-level employee surveys and people analytics to more than 30% of the Fortune 100. With an unrivaled technology platform and a tailor-made, flexible approach, the Perceptyx technology makes it easy for managers and HR or business leaders to discover insights deep within large and complex organizations, driving meaningful action to improve business outcomes. Driven by a deep intellectual curiosity and culture of innovation, Perceptyx is challenging the status quo – to help people and organizations thrive.
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 investments include Alarm.com, Altiris, Ariba, Avalara, Avetta, AxiomSL, CCC Information Services, ExactTarget, ETQ, FinancialForce, Genesys, IQMS, OSIsoft, Rapid7, Rave Mobile Safety, Sitecore, SMT, Splunk, Toast, Vectra AI, 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 http://www.tcv.com.
SOURCE: Perceptyx, Inc.
Media Contacts:
Perceptyx Daniel Norwood Phone: 951.526.2422 dnorwood@perceptyx.com
The opportunity set for SaaS is on the rise. The original SaaS model that revolutionized software is now enabling SMB and vertical SaaS companies to evolve from tool companies to market makers. Pioneers of these new SaaS models not only provide a tech platform to service providers, but also strengthen their position by extending into marketplaces. When these providers aggregate enough supply, they leverage their data and mindshare advantages to create two-sided marketplaces that enjoy powerful network effects. The result is a much stronger financial profile, deeper moats, and a significantly larger TAM.
TCV recently hosted an offsite focused on emerging trends that we believe are dramatically expanding the opportunity set and economic strength of vertical and SMB SaaS companies.
We were fortunate to have Brian Rothenberg as a speaker. Before joining a leading new early stage venture firm Defy as a Partner, Brian was on the leadership team that took Eventbrite from startup through IPO – while evolving the company from a SaaS platform for event venues to a marketplace for live experiences.
In this conversation with John Burke, EVP at TCV, Brian explains the steps and structures necessary to accomplish this strategic transformation and reach scale. He also offers priceless tips on timing and managing relationships with original SaaS clients that leaders can apply as they focus on dramatically expanding their addressable markets.
To talk about SaaS opportunities and get a copy of the presentation, please contact John Burke or Katja Gagen at TCV.
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 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 https://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 https://www.tcv.com/terms-of-use/.
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/.
