Nine months after choosing the capital markets over a more traditional venture capital route, we catch up with blur Group, and CEO Philip Letts, to find out how progress has been.
Technology company blur Group has now been listed on London’s Alternative Investment Market (AIM) since October 2012. The business, which was founded by serial entrepreneur Philip Letts (former CEO of Surfkitchen, Tradaq and Beenz.com) has already gone back to the market to raise a further £7.6 million.
The business allows creative and technical minds to pitch for projects posted by large companies around the world.
Aside from using its capital market funds to speed up customer acquisition, blur has also been investing in its innovation and development work. Its new R&D centre in Exeter will be drawing upon a region which has four of the country’s top 20 universities and start-up investment totalling $550 million.
To find out how life has been since choosing the capital market over venture capital backing, GrowthBusiness journeyed to blur’s headquarters in West London to meet with Letts.
How has progress been since you listed?
If you look at our Q1 metrics update, which is our most recent ahead of our Q2 update out on 9 July, we saw continued growth in all or our key metrics. For us, the driver of demand is number of new projects coming onto the exchange and we saw 359 projects come on, which was up about 40 per cent on Q4 last year.
Our rate at which we are bringing on businesses has now nearly doubled since Q4, to the extent that we are now seeing 1000 new businesses a month on the exchange. Those are from 141 different countries and we now have over 30,000 businesses who have adopted the platform.
We also announced our secondary offering which means that, in last nine months as public company, we have raised just under $20 million.
How different has it been running a public company?
To be honest it’s not that different to running a later stage institutionally-backed private tech company, which is what myself and my team have been doing for many years. Where there are differences, it’s just getting used to the level of transparency and scrutiny involved. You put out an announcement regarding numbers and everybody is looking at it. That in itself is different.
You have to be careful about what you’re saying, not talking about things you can’t tell people about.
[With our fundraising] we’ve focused initially on UK fund managers, before thinking about international ones, and we’ve found them to be very smart and tech savvy. They know what they like and have been very successful in last 10 years with exits involving companies like Autonomy.
How was the secondary fundraising and what new investors have you brought in?
We did it a lot earlier than we thought we might, so it went very well. The single big thing that makes me value being a public company is that the time between when we green lit the secondary to it being closed, done, dusted and announced, was exactly four weeks – with a five day roadshow. In the private markets it would have taken five times that do be done. It was very well received, oversubscribed, and we added some wonderful new institutions – as well as getting backing from nearly all of our existing investors.
What is the new R&D centre about achieving, and why in that area?
If you look at the use of proceeds from the IPO and then look at planned use form second financing, we focused our investments on two core areas.
One is to increase our growth of acquisition and the way we service our customers on the platform, and that has been very successful – so we are going to do more of that. But the other thing we said we’d do is continue to innovate, extend the platform and do some things with technology that will surprise the market. We’ve just announced the launch of blurSense, a decision and recommendation engine which further automates the pitch selection stage of blur’s 4-step online exchange process. This further reinforces what we have been doing in terms of technology in investment.
Opening a new R&D centre in Exeter is a new statement of our ambitions when it comes to continuing to be an innovator in this trillion dollar space.
What are the plans for the rest of the year?
More of the same really. We’ve more than tripled the business each year since we started it, so this year is about doing that again – and the consensus is that we’ll turn over about $8.5 million this year. The first half of the year has been very strong, so it’s about continuing to drive the adoption of s-commerce and our platform for businesses. We’re now at 30,000 businesses, and the next stage is to get to 50,000 – and 2013 is key to bridging that gap.
This year it is about making the right investments so we start getting clearer about exactly how profitability lies, and make sure we bring more and more projects onto the exchange from around the world. The US is now our largest market, and the UK is still second largest – but that is getting more competitive as we get more international.
What AIM companies do you particularly admire?
The one that we’ve probably tried to understand the most is ASOS, unsurprisingly. In terms of digital media and tech companies in that broad spread they are without doubt the one who has been most successful on AIM. They are very clear about what their USP is, no confusion, and are trying to bring the Amazon approach to clothing.
If you look at the two most successful tech IPOs last year, it was WANdisco and us. Naturally we get lumped together a bit and compared, but I think they are doing some very intesting things. Their offering is very techie but it is playing into the big data trend which is very important. I think that the cases of blur, WANdisco and ASOS are great examples, and hopefully there will be more.