After OneVentures first met enterprise software provider Phocas, there was a considerable lead time before an investment was secured. “We were looking for opportunities,” OneVenture’s founding partner and managing director Dr Michelle Deaker explains. “Deloitte introduced Phocas to us about 18 months before the opportunity opened up. They said: ‘Look, we don’t know if they are raising capital, but they could do with some support. It could be a really good fit. If you open a dialogue, that might lead to an investment."

Dr Deaker was attracted in part by the people, something she believes is critical in investing. The company had a great culture. “This was still about 18 months before the opportunity opened up, but we liked the people which is really important when you are establishing a long-term investment relationship.” What she saw was a company that had built a software-as-a-services (SaaS) platform that centralises a business’ data allowing the business customer to extract significant insights from their own data making decisions easier. “They already had significant global market share, were winning awards and yet seemed to us to be completely under-capitalised relative to the opportunity,” Dr Deaker explains. “There we so many areas, with just a little bit of our support and guidance, where the company could grow by investing in sales and marketing and expanding the leadership team.”

Phocas has been around since 2001, and for much of that time was self-funded. It developed software to help executives better plan, to lead and to sell based on more insightful analysis of sales and other data which has now expanded into offering financial statements, budgeting and forecasting what the company calls expanded planning and analytics (XP&A). One of its maxims is that spreadsheets are not the right tool for these tasks. By contrast, its service helps executives to find a single source of truth, to be more productive, to collaborate and to discover trends. Its users operate in manufacturing, distribution and retail across a broad swathe of industries including automotive, building, consumer goods, electrical, food and beverage, health and scientific.

In that 18 month period, OneVentures helped the Phocas leadership to develop a new plan to accelerate the growth of the company to capture the significant global market opportunity.  “We provided a different perspective on what the company could become,” Dr Deaker says. “If the company invested more in sales and marketing, expanded its products through investing in innovation, built out its business processes and built out its leadership team – the Founder and now CEO, Myles Glashier and then CEO, Phil Dodds were being almost every C-level role in the company and leading UK and US operations – it could realise its potential.” Also, some early investors who were no longer closely involved with the company were limiting the company’s growth by placing pressure on the company to pay dividends versus re-investing in sales and marketing growth. So a decision was made to restructure the business as part of the go forward plan and this opened up the opportunity for OneVentures to invest in 2018. That involved moving the company back to Australia from the UK, consolidating into a new holding company and buying out some of these early legacy investors so that the company could refocus on its growth plans.

OneVentures provided highly operational support in the development of the new business plan. “We travelled around Phocas’ global offices and interviewed staff so we could provide guidance to management on areas where there was low hanging fruit for change. We saw immediate opportunities for improvements in sales processes, pricing models, new key hires and increased investment in marketing. That helped us to show how the company could unlock future value more rapidly.”

The product was fine, but there was an opportunity to invest more heavily in research and development so it could develop and sell more products to existing customers and expand into new markets. As part of this and the growth plan, the company with OneVentures embarked on a broadening of the leadership team, which included appointing managing directors in the UK and in Australia and a president in the US. A CFO was also appointed to act as a right-hand man to Glashier. Glashier was then able to fill out the product team and introduce new pricing plans with annual increases to boost ongoing revenues. The result for OneVentures has been that, after the latest round of capital raising, it had made a five-fold return on its initial investment. Phocas has another round since then, and is now heading towards another. Dr Deaker says that OneVentures would likely chip in more money.

For his part, Glashier says that when OneVentures came on the scene he did not realise that it needed as much change as he does now. “I grew up in Sydney and travelled the world and set us this business in the UK. It was a wonderful global business with 70 per cent of revenue in the Northern Hemisphere. It was a massively profitable business. But it got to the stage that some of the original founders wanted to do a little less work and take some money out of the business. That’s when I realised we could go from being a nice business to a really great, Australian business. But we had to start re-investing. Before we met OneVentures, we had started to do that but, when Michelle arrived, she really moved it along.

“As a founder-led business, we’re massively passionate. We’re hardworking. We’re typically smart. But you don’t know what you don’t know. So, having a non-executive on the board with experience like we got with Michelle who has done all of this before, brought insights we had been missing out on. (Things like) looking at our pricing structure, how to raise pricing and building out the leadership team so we could scale the business. She helped us find people in the business, and others who we could network with and learn from.” Advice was given on how to run the board better, attend more to governance and the board got “down and dirty”.

Glashier also says OneVentures met with Phocas’s teams and made suggestions such as mentoring existing staff. “That was massively powerful,” Glashier says. “Having someone supporting me as the CEO has been really good on my journey. That’s probably the first phase of growth that we needed, and the second phase is getting us into the position where we can scale. That has brought a real change in mentality. For a boot-strapped business, it’s now about bringing more money on board - more fuel in the rocket ship. OneVentures has helped by putting in money themselves, but also introduced potential investors. We were probably doing around $24 million in revenue? then and now we are around $60 million. With some new products that we have developed, we can be $500 million-$1 billion business in the next five years. That is really what we can achieve from the mindset that we now have.”

The expanded senior management team is delivering. Glashier says that the recent hiring of a chief technology officer and product officer have been game changers. Other benefits have come from hiring a chief financial officer, someone who he says knows about what big business looks like from a governance and financial viewpoint. There is also a head of people and culture, and soon Phocas intends to appoint a chief revenue officer.

Another initiative that Glashier is pushing is to seek certification as a B Corporation. This requires companies to assess their social and environmental impacts through a comprehensive assessment so they can consider all stakeholders. “We amended our constitution recently to ensure that, when we make decisions as a board, we don’t only look at the bottom line. We will also consider our customers, our partners, our suppliers and the planet. We have a sustainability mindset, which for a company of our size is probably ahead of the game. We’re starting to look not only the impact we have on the planet and how we can improve it, but also how we can help our customers do it too. As they look at it, maybe we can help them to analyse their own data to build a better business and do better for the planet.”

Published August, 2022

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