Software Pioneer Conquers New Markets With Finance Package
ProofHQ spotted a gap in the software market and Santander's backing has helped the company sell its solution globally
- Sector: Software Services
- Launched in 2008, ProofHQ offer an innovative software package enabling marketing departments and creative agencies to collaboratively review and approve documents online with robust workflow controls.
- By 2012, the company had a proven product with customers in 50 countries. It was poised for further expansion but lacked personnel in sales, marketing and business development.
- Santander helped by funding a mezzanine Growth Capital loan plus current account, internet banking and multi currency accounts.
- Although a mezzanine product, Santander’s Growth Capital Loan did not require the founder to surrender equity and was backed by comprehensive banking.
- There will be up to 26 new hires across product development, sales and marketing, plus a new FD.
With a customer base that includes supermarket chain Tesco, US telecoms giant AT&T, and UK car insurance company Admiral, ProofHQ is a British software company that has carved out a global niche. Launched in 2008 by CEO Mat Atkinson, ProofHQ’s software is an efficient way to review, edit and collaborate on documents. In the last year alone, the business has seen revenues grow by 140%. Demand for the product is now proven and with funding from Santander, the company is positioning itself for further expansion.
The software concept
The idea for ProofHQ came about in 2006, when Mat was running a software company he set up to provide printing workflow services to marketing departments and creative agencies. While working with clients, he saw the delays and frustrations associated with getting marketing collateral reviewed and approved. Typically, designs would be passed round as PDFs via email attachments – an imperfect method at best. Mat set about developing software that would streamline the process, enabling marketers to review documents (with text and visuals) online while also managing workflow.
Two key developments in the software/IT marketplace smoothed ProofHQ’s path from drawing board to market. “We began work at a time when software development costs had begun to plummet, so we were able to get a product to market without external funding,” says Mat. Equally important was the arrival of software as a service – with IT functions delivered from remote servers, often on a pay-as-you-go basis – which created new opportunities. “That meant marketing departments were able to experiment with new products. They could test-drive software without making a big upfront commitment.”
The next level
There was immediate interest in the product. Mat says, “By 2012, we had achieved product/market fit, meaning that we could sell our products without significant customisation for each customer. We were also getting feedback from customers who were getting great ROI. At the same time, companies in our target market were actively looking for a proofing product. The market was crystallising.” These factors meant ProofHQ was well positioned for rapid growth and greater profitability – but funding was required.
An alternative to private equity
Mat was reluctant to raise money through private equity at this stage in ProofHQ’s development. Having heard about Santander’s Breakthrough programme and the Growth Capital Fund available to fast-growing SMEs, he contacted the bank. Initially, the inquiry was handled by Ramon Juraboev, Investment Director in the Growth Capital team. Juraboev was impressed by what the company had achieved.
“They had a blue-chip customer base and an established product,” he says. “They also had a very strong management team led by Mat and Chief Technology Officer Anthony Welgemoed.”
ProofHQ’s initial requirement was for Growth Capital but once the introductions had been made, Ramon and Santander Relationship Director Simon Ambrose worked with the company to look at the possibility of a more comprehensive package.
Mat was impressed by Santander’s ability to fully comprehend the business model. “I felt Santander understood us and in particular the importance of recurring revenue in our business model. They didn’t try to impose their own agenda on the business. When you raise cash through private equity it can create a significant overhead for management, and I wanted to avoid losing focus on customers and product.”
Following the negotiations and due diligence, Santander provided Growth Capital plus a current account and online banking for their day-to-day needs. There was also an international dimension: ProofHQ has employees in Europe and the US, and clients in 50 countries, so Santander provided multi currency accounts. In addition, ProofHQ is looking at opening an account with Santander’s US arm, Sovereign Bank.
Santander’s funding is enabling ProofHQ to hire the staff that will drive future growth. “Before the deal we had 35 employees but only one sales person,” says Mat. “Now we have the resources to grow the team and hire people to manage direct sales, partners and channels.” In total, the funding will underpin up to 26 hires across product development, business development, lead generation, finance and administration. Key appointments have already been made, including a Finance Director, Vice President of Sales, Senior Marketer, and Head of Customer Success.
“In 2012, Proof HQ had more than 700 customers in 50 countries,” says Simon Ambrose. “The growth so far has been astronomical and we expect that to continue.”
The relationship extends beyond lending. Santander is also planning to help the company take on an intern under the Breakthrough Programme and the team has also provided advice on areas such as cashflow planning. It’s an ongoing partnership.
What is Breakthrough?
Breakthrough is a programme of funding, business support, events and consultancy to help high-performing small and medium-sized enterprises (SMEs) leap to the next level of sustainable growth. Taking part in Breakthrough does not guarantee access to all elements, as each programme is tailored to meet the individual requirements of the business. To find out more, register your interest, and to see if you are eligible, visit the Breakthrough website.
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Relationship Director Comments
The company was very entrepreneurial: the management team knew exactly why the product had proved successful. They had ambitious plans and we felt we could contribute to those plans.