Yet another hot tech company has been sold offshore, with Dunedin’s Timely being bought by Denver-based EverCommerce.
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It’s the latest in a long-term trend, which seems to have accelerated recently. March saw three major offshore sales with Kumeu mobile game developer Ninja Kiwi sold to Sweden’s MTG for $203 million, Auckland-based retail software firm Vend going to NYSE-listed Lightspeed for $450m, and Christchurch geologic 3D modelling outfit Seequent acquired by Nasdaq-listed Bentley Systems for $1.45b.
A price was not immediately disclosed for the Timely-EverCommerce deal, but founder Ryan Baker told the Herald this morning that it will be subject to Overseas Investment Office approval – indicating that it is somewhere north of the OIO’s $100m threshold.
There were counter-veiling forces at work in the build-up to the transaction amid the coronavirus, but comments to the Herald this morning indicate Timely was on the up.
Founded in 2011 by Baker, Andrew Schofield and Will Berger, the startup now has 50,000 beauty professionals across 90 countries that use the cloud-based business management software to book more than 30 million appointments per year.
But Baker has also spoken candidly about the stress of pandemic lockdowns, and the boom-and-bust cycle effect on Timely’s revenue early in the outbreak. The sudden loss of revenue was “scary”, he posted in an emotional thread that also paid tribute tothe government’s handling of the pandemic, saying, “NZ’s Covid response & financial support was a foundation of our success.” (Timely took $458,294 in wage subsidies.)
This morning, the CEO told the Herald, “It’s a fantastic outcome for the shareholders and the company. We have really nice alignment with EverCommerce on our values and direction. The team here are fizzing.”
Both parties want to keep the terms of the deal confidential, Baker said.
Timely’s chief people officer Mary Haddock-Staniland added: “This reflected the success of Timely’s growth trajectory.”
While not able to reveal pandemic financials, Baker told the Herald his company had expanded over the past six months from 85 staff (the number it had at the height of lockdowns) to 125.
“Like many companies, Covid was a game of two halves for us. An existential crisis to begin, then a tailwind from accelerated digital adoption,” he said.
“Our last major funding round was $7m from Movac in 2017 and Timely has remained profitable since early 2020 when the outbreak began,” Baker said.
Companies Office records show Movac with an 18 per cent stake ahead of the deal – implying that Timely was valued at around $40m when the VC fund bought in three years ago – and by Baker’s account, there has been a lot of growth since.
Leg-up for faster global growth
Baker said EverCommerce, which has around 500,000 service-business customers worldwide, has the chops and the scale to help Timely expand more quickly around the globe. It could help Timely expand from hairdressers and beauty parlours to health and fitness centres and other markets where its new owner had influence.
And while offshore owners have had a patchy record on promises to keep NZ staff at the same level, such a commitment is in place for this latest deal.
“There are no plans to change the teams in New Zealand, Australia or the UK and we’re continuing to hire in all these markets,” Baker said.
Haddock-Staniland added, “We are absolutely committed to keeping our teams in place, as it is. There will, of course, be natural team changes that arise due to our growth plans, such as some of the internal promotions. Overall, these changes present wonderful career opportunities for the team.”
Timely's key shareholders
Going into the EverCommerce deal, Scofield and Baker were the largest Timely shareholders with a 28 per cent stake each, with local investment funds Movac (18 per cent), Hoku Group (11 per cent) and Punakaiki Fund (4 per cent).
Movac, which has also been a major shareholder in Vend, PowerbyProxi and TradeMe before they were sold offshore, did not offer immediate comment but has previously emphasised that money from overseas sales is recycled into the local ecosystem.
The Kiwi VC fund has recently put millions into early-stage local companies including Portainer and Tradify.
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