Paul Gilshan, CEO of Tusker, the company making it greener, easier and cheaper for you to get a car, joins us for our latest Building Successful Businesses episode to talk about working at ‘the Netflix for cars', how to build a truly sustainable business and the journey from CMO to CEO.
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Fiona: Welcome to ECI's podcast, "Building Successful Businesses," where we speak to CEOs about the building blocks of their success and the lessons they've learned on the way. I'm Fiona Moore and today I'm delighted to be joined by Paul Gilshan, CEO of Tusker, a company that is on a mission to help your employees get better cars. Gilsh, welcome.
Gilsh: Hi, Fiona. Thanks for having me.
Fiona: Now, obviously ECI invested in Tusker because we understood the huge growth potential for the business. But, for people who don't know Tusker, can you explain a bit about what you do and what's driving that growth?
Gilsh: Sure, Tusker is a new car subscription platform, or as I tell my friends, we're the Netflix for cars. So, if you think about Netflix, for one fixed monthly amount and no deposit, Netflix gives you access to lots of great entertainment. Well, salary sacrifice car leasing is based on a very similar idea. You pay a fixed monthly fee, no big upfront payment, and we give you a brand-new car. Then we sort everything else out at no extra cost. So, that means insurance, MOT, road tax, repair bills, charge point installed at your home, if you want one, and best of all, you get a brand-new car.
It works through salary sacrifice as an employee benefit. So, that's similar to cycle-to-work salary sacrifice schemes, or childcare vouchers. We don't like the word 'sacrifice,' so we call it salary saving. It's a bit nicer. We represent hundreds of companies across the public and private sectors, so large corporates, councils, and NHS trusts. It works for their employees because they love the no-hassle leasing. They love that bundle of everything included. And it works for businesses as it helps them aid employee retention and acquisition. I think we all know that it’s never been more important for companies to offer an excellent benefits package.
Then you're asking about growth. Well, due to the savings that are available through salary saving, it makes driving electric the most affordable way. And more and more people now want to switch to electric as they look at their emissions and more electric cars are available. So, we are at the forefront of driving the uptake of electric vehicles.
We were the first to launch salary saving for cars in 2008. We're the market leader, and we provide thousands of electric vehicles to drivers. I think the important thing there is the majority of our drivers would not have opted for electric vehicles or a new car, had it not been for the salaries saving products. So, nurses, engineers, analysts, airline staff, council workers, and thousands of employees across the UK are getting access to a new electric car for the first time.
Just on numbers, we're growing pretty fast. We have a fleet of over 20,000 vehicles and we'll double that to over 40,000 within the next two years. Last year we represented 2% of all electric sales. So, more and more people want to subscribe to a lease as an easy and simple way to run a car. More and more people want to lower their emissions by switching to electric. At Tusker we tick both those boxes. Companies love the benefit as do our drivers. So, yeah, it's a win-win.
Fiona: Do you think the UK is on track to hit the target announced at COP26 last year to have 100% zero-emission cars and vans by 2035? Obviously, Tusker is part of how the UK is reaching those targets.
Gilsh: I think we're actually behind where we need to be. I think companies like Tusker are vital. There are really challenging goals set by the government. Very ambitious. All leasing products need to play their part in order to help the government to meet the 2030 target, the 2035 target and ultimately that 2050 target of net zero.
My concern is how we ensure that everyday drivers, particularly those on lower salaries, move to electric vehicles. If you look at other leasing products like PCH or Personal Contract Purchase, for them electric cars are more expensive than the petrol or diesel equivalent. So, there's no financial motivation for drivers to opt for electric.
We're also seeing very high prices in the secondhand market. That tends to be a market where mass-market drivers first try out new models. So, if that secondhand market is too expensive, then there needs to be a product that caters for mass market everyday drivers. That's where businesses like mine, like Tusker, are key.
We make electric vehicles affordable for everyday drivers. Not only affordable, but they're cheaper than diesel or petrol. Companies providing salary-saving car benefits play a huge role in ensuring government meet those COP26 and the road to zero targets. I'm really proud that we are we're helping more and more people and helping the government to achieve those targets.
Fiona: Tusker isn't just helping other businesses to decarbonize their fleet. Last year, you also became a net positive contributor to the environment. What does that mean? What changes did you have to make in your business to achieve that? And any advice for other CEOs that are thinking of doing it in the future?
Gilsh: A lot of companies talk about being green. We've been carbon neutral since 2010. Over the years, we've offset over 250,000 tons of carbon which has supported loads of green initiatives across the globe. We've got wind farms in India. We transform rubbish dumps in the far east. So, we invest a lot in offsetting.
We offset our own business emissions as well as the tailpipe emissions for all our drivers. But for us, it's part of our overall strategy. It’s something that is part of the everyday. I think if you just have it as something in the background and you only have a few people looking at sustainability in a company, you really won't get traction. At Tusker it’s embedded in all employees in the business that we want to reduce emissions. So, I think making it at the heart of the business, is the advice I'd give to other CEOs.
Last year, as you said about being net positive, we went one step further and decided to offset the emissions from all our charging, so all our drivers' electricity consumption. And then we offset an additional 10% above our emissions to ensure that we're now positively impacting our environment rather than just offsetting. It’s right at the heart of the business. We are passionate about it.
There's a group of companies called the EV100. We were one of the founding members. It's a group of global companies that are committed to speeding up the uptake of electric vehicles. We pledged through our membership of the EV100 for our fleet to be fully electric by 2030. Currently, over 50% of our fleet is fully electric. So, we're well on our way. I think that's another thing. Having targets that you are aiming for gets the business behind it as well.
Fiona: It's clear to see how that green mindset is embedded in Tusker. From a personal point of view, have you always had that mindset or is that something that's come as part of joining the business and understanding how they operate?
Gilsh: No, it's always something that I've been passionate about. When I joined, the fleet was very different. There weren’t many electric vehicles in the UK. In 2017 and 2018, we knew that this tide would turn as more supply came. We knew that more people were looking at their emissions, and more companies were looking at their emissions.
So, we'd planned for this growth and built the business around it so that when the tide did turn, when the supply came, we were ready to take advantage of it. So, it's been something we've been planning in our business, and I've been planning in our business for some time.
Fiona: And long before you joined Tusker, if we go back to the start of your personal career, what was your first ever job? And what did you learn from it?
Gilsh: Well, my first ever job was a paper boy, and then I was a baker in Sainsbury's - early shifts. But the first real job was when I moved to London after university, it was for an advertising agency. And I worked on brilliant accounts like Walkers Crisps, The National Lottery, Peugeot, and Channel 4.
With the team at Channel 4, we worked on the launches of two digital channels, E4 and more4. I learned so much at Channel 4 but especially on those launches about media, marketing, taking risks, teamwork, getting things wrong, getting things right, and hard work. I think the biggest thing that I learned was about the importance of creativity and doing things differently and balancing that with commercial success. So, TV is a really tough – brilliant - but really tough industry. And you find out quickly, what's working and what's not.
There are lots of marketing campaigns where you maybe wait a month, two months, or three months to see if you're successful. In TV, your campaign's out, and if you haven't got the numbers viewing that program the next day, then you haven't been successful. So, it's quite brutal. You can have the best creative idea in the world, but you have to make it work. You have to make it visible. You have to create a reaction. It has to change behaviour. It has to work.
I think that's the biggest learning I took from my time in advertising in that first role. And that led me onto other roles at Sky and The Times. But ultimately you can have the best idea in the world, the same as practising business. The best idea in the world, but you have to make it work. You have to have a team around you that helps you make it work and not just have the idea.
Fiona: And that creativity point, making it work and hard work, it feels like something that translates quite directly to leading or being in the top team of a business. Does it surprise you that it's not a more common route going from marketing into CEO because obviously, you were a CMO at Tusker before becoming a CEO?
Gilsh: There are definitely more people doing it. You're right, in senior roles it’s probably one of the less common routes, but there are more and more people doing it because marketing teaches you a broad range of skills. Creativity, the importance of data and insight, understanding audiences, and commercial acumen. Ultimately, for me, marketing is a balance of brilliant people following a clear strategy to produce great ideas. Then the next bit is the most important: strong execution, commitment to delivery, and hopefully, delivering fantastic commercial results. I'd call myself a commercial marketer because you need to have the results. You can't just put ads out there and campaigns out there, it needs to deliver for the business.
And everyone plays their part. There's a creative team, researchers, a media team, and a production team. Everyone has a role to play. I think that's very similar in business, very similar. At Tusker you need great people around you committed to a strategy, that want to deliver for your business. And then they need focus, and we need to focus on delivering that strategy every day.
At Tusker, we follow our winning-together strategy, which means we're committed to helping more people drive better cars, and we commit to that every day. Everyone's bought into it, and we commit to it every day through excellent customer service, keeping things really simple for drivers, making sure we have a brilliant digital offering, educating our drivers through great communications and everybody plays a part. Every team member can play a part in that.
Finally, again, learning from marketing. If things do go wrong, just learn from them, move on, and do it better the next time.
Fiona: What has your business success, becoming CEO, what has it taught you about yourself as an individual?
Gilsh: Trust your instincts. I think you can have all the data in the world which can lead you to an obvious decision. Okay, that's the obvious thing that you need to do. But if your gut really tells you that something's not right, it usually turns out not to be right. I think that also plays for your team. If your team are telling you that they don't think something's right or something doesn't feel right, you have to believe in them as well. So, yeah, I think, obviously, build your business on data, have the right research, and the right insight, but ultimately trust your instincts.
Fiona: And you mentioned trusting your team as well, is that something that you find easy? Is that something you always found easy? Do you find delegating easy or is that something you've sort of had to learn as you've moved up?
Gilsh: I think that's definitely something I've learned and got better at. I think, in marketing, you want to be part of everything. You want to understand exactly what the research is saying, what the insight team, what the strategy team is saying, how the media works, and you want to be all over it. And I think that's been my biggest learning that when you move into another role, you've got to trust the team below you to deliver for you. And not be over every part of every department. Let them breathe and give them autonomy. Because ultimately, you've got people around you that you want to be successful and are very talented in their discipline and area. So, you've got to let them grow, and let them fly, and let them make their own decisions, and make their own successes, and celebrate with them. I have found that, yeah, I think that's been one of my biggest challenges - letting go.
Fiona: For other entrepreneurs and CEOs, what advice would you give to other business owners more at the start of that journey?
Gilsh: Well, I've said trust your instincts, but I think it's back to that people thing. It might be a cliche, but find great people to work with, challenge them, and create a culture that means they'll want to stay working with you. It sounds really easy, but that needs hard yards every day. The team at Tusker are committed and passionate about providing the very best for our drivers and the enthusiasm they show on a daily basis for getting the job done is outstanding.
But it's off the back of that strategy. We all want to win together, something we want to nurture as we grow. The culture is something special and something I'm proud of what we've created, what we've built. And it is off the back of, you know, our strategy that we've all committed to and we're all following.
Fiona: What's next for Tusker? You've mentioned some actual deadlines and targets that you guys have set. But what's next in the near future for you guys?
Gilsh: So, having targets is good, but some of them are quite far away, like that 2030 target, even if I think it’ll probably come into 2028. But, you know, we're only really at the start of our journey. There are so many businesses that we want to offer this benefit to for their employees. So, we're focused on providing as many employees as possible with an affordable way to drive electric or low-emission cars.
Over the coming months and years, we'll launch new features and products to ensure that we remain the market leader and drive down emissions across the UK. That means we'll constantly be working to improve and better every part of the service we offer. And we’ll continue to work with, as I've said a lot through this podcast, the best people. At the moment we know we've still got a long road ahead to get as many people, particularly those everyday drivers, into electric vehicles.
Fiona: Well, Gilsh, thanks so much for talking to me today, from baking to "E4," to now Netflix for cars. It's a really interesting journey and it's clear the move to net zero is something that's only going to grow in momentum. So, thank you for sharing your story. And now I look forward to watching you lead the way in the electric car revolution.
Gilsh: Thanks, Fiona.
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Whether they’re sitting on a beach soaking up some holiday sun, or at home desperately trying to cool down in front of a tower fan, we find out what the ECI team are reading this summer!
The Tyranny of Merit, by Michael J Sandel
Meritocracy is a good thing, right? I came to this book a big believer that we should aim to build a society and workplaces where individuals can rise as far as their talent and hard work can take them. However, Michael Sandel does a great job of calling this worldview into question. Is there such a thing as a true meritocracy? And even if there is, is it a good thing? His thesis is that the playing field is never really level, we all have different starting points.
Furthermore, how do you account for luck and circumstance? Most strikingly of all, Sandel argues that even in a pure meritocracy, those who rise to the top will believe their success is entirely deserved, creating a sense of entitlement. Conversely, those who are left behind are made to feel that their predicament is of their own making, and this can drive feelings of resentment and humiliation. Sandel argues this has contributed to the recent rise of populism in the US and UK. It’s always interesting to read a book that challenges some of your fundamentally held beliefs. If nothing else, the book offers an important reminder that even those who feel they are successful within a “meritocratic” society should stay humble and appreciate the contribution others may have made along the way (be that a parent, a teacher a colleague or anyone else) and to treat all members of society with the respect and dignity they deserve.
Skyler ver Bruggen
Cry of the Kalahari, by Mark and Delia Owens
I picked up Cry of the Kalahari at the tail end of my honeymoon in Gabon. We’d just spent a week tracking gorillas and elephants on safari, so the autobiographical account of the husband-and-wife team of Mark and Delia Owens studying lions and brown hyenas in Botswana appealed. While there are lots of differences between our two experiences, they captured a similar sense of adventure. Since writing this Delia has gone on to have great acclaim with Where the Crawdads Sing which is now a major film. It is interesting reading this book to understand how the remote hardships of the Kalahari informed her later work set in the marshlands of North Carolina. The world has changed significantly since Mark and Delia lived in Botswana in the 1970s but the focus on conservation that runs through the book is possibly even more potent today than it was at the time of writing.
Atomic Habits, by James Clear
I picked this book up after failing to do my physio-recommended exercises for what felt like the hundredth time in a row. Atomic habits look at the psychology of habits and what helps us to form and sustain them. Firstly, Clear argues that too many people think massive change requires massive action which is hard to do. That means people get discouraged and end up making no change at all. His view is that regular, marginal gains compound and lead to big changes over time (see also British cycling’s 1% gains strategy!) Secondly, he moves habit formation away from the nebulous concepts of motivation and willpower. He argues that clear, practical structure is what drives us to repeat behaviours. Making habits easy and obvious, and then rewarding ourselves is what will push us into repeating behaviours. So, my physio band now lives on my office desk, I do it at the same time on set days, and I can’t have my morning coffee until I’ve done the exercises! If nothing else, the book forces you to think about the habits that you want to implement in life and how to prioritise them. I’m now three weeks post-reading and haven’t missed an exercise day – so far so good!
No Rules Rules: Netflix and the Culture of Reinvention, by Reed Hastings
In between reading Tales from Acorn Wood with my 1-year-old daughter on holiday recently, I also found time to read No Rules Rules, which is Netflix CEO Reed Hastings and Erin Meyer’s book on the culture at the streaming giant. The principles they discuss were incredibly unorthodox when they were setting up the company and rejected much HR wisdom at the time. That included removing unnecessary controls from employees and a focus on marrying freedom with responsibility. A good example of that is Netflix not having vacation or expense policies. The book also looks at the theme of radical candour, rather than trying to please your boss, you give them honest feedback instead. While all of the ideas won’t be for every business, it’s a really interesting study on how they have fostered a culture of constant innovation, and what they’ve learned. The result is employees throughout the business are empowered and encouraged to think creatively and challenge what has gone before.
Travels in a Thin Country, by Sara Wheeler
I picked up this book as, while I have only been to Chile on a fleeting visit, I was fascinated by the incredibly varied geography and ecology of the country. Travels in a Thin Country describes warts and all, Wheeler’s journey from the northern Atacama Desert to Patagonia in the south over the course of several months. She brings to life the great landscapes, the people she met and the political climate after the Pinochet years. That is all enveloped in her own personal thoughts and feelings while travelling. Her account may be slightly dated, but it is a great introduction to the country, even if it isn’t a modern travel guide. My bucket list trip is to drive tip-to-tip in Chile, so the more inspiration the better!
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Certification™ is a very significant achievement as it is based on anonymous surveys of employees’ experience, scoring the business across different aspects of workplace culture, such as inclusivity, employee wellbeing and management.
The process also requires written submission from organisations, outlining their employee experience, how its people are involved in developing new ideas and better ways of doing things, and how – regardless of their role- employees are made to feel included and able to reach their highest potential. It's great to see Moneypenny get this ultimate recognition of its collaborative and inclusive culture.
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Following a recent panel on M&A activity in the travel sector at the 2022 Travel Tech Show - titled ‘The post-covid M&A avalanche’ - George Moss shares his views on investing in the travel sector.
Post-covid M&A volumes have grown strongly with 2021 seeing a 25% increase globally in transactions across the board. While that might have come off in 2022, M&A activity in the first half of 2022 was still at pre-pandemic levels, indicating a return to M&A business as usual in many ways.
Initially, a lot of this activity was focused on sectors such as tech and healthcare, where there was a busy-catch up period, but that were also seen as less impacted by the pandemic. Consumer businesses and especially travel businesses saw much more limited M&A activity. Many travel businesses were heavily impacted by domestic or global lockdowns and some of those that did transact did so more due to being distressed and needing to refinance their balance sheet.
However, over the first half of 2022, M&A in the travel sector is slowly returning. For trade buyers there is a fantastic opportunity to add products, services, or technology to their platforms as, following a tough two years for business owners, there are often buying opportunities at attractive valuations.
For private equity buyers, there is still interest in travel, however, this remains slightly muted for now as investors assess the outlook for international travel, calibrate what the new normal really is for travel patterns post-covid, and assess how consumer spending is going to hold up in the face of recessionary clouds.
At ECI, we’ve been investing in travel for several decades and that means we’ve seen multiple recessions, foot and mouth disease, Icelandic ash clouds, the impact of different wars, and more recently the pandemic. We understand how to take a long-term view and the importance of a resilient business model and, despite those disruptions, we have generated aggregate returns of over 4x from our investments in travel businesses over the years. This includes notable successes such as CarTrawler and Great Rail Journeys as well as more recently, Travel Chapter.
So, what’s next for the travel sector? The pandemic disruption hasn’t ended, but high-quality businesses have found ways to respond effectively and have focused on a customer-first approach that means consumers can book with confidence. This is likely to lead to a flight to quality, as stronger businesses take market share in a post-pandemic world.
We’d also expect to see tighter regulation, higher costs, and less predictable volumes. These will drive innovation and consolidation in the sector, so we’d anticipate more corporate M&A. We have already seen some of that in the business travel market given the fundamental changes in that sector post-covid as well as in flight and accommodation, where booking.com bought Etraveli and Getaroom for c $3bn in a spending spree at the end of 2021.
There has also been a devaluation of public market travel and leisure stocks, with FTSE All share travel and leisure stocks down over 30% since this time last year. If that trend continues, we’d potentially expect to see more take-privates occur.
Valuations remain tricky as booking volumes build and stabilise to a ‘new normal' post-Covid, with the backdrop of the Ukraine war and the cost of living crisis creating new pressures. However high-quality businesses could still command premium EBITDA multiples, but that means having a clear growth story, good revenue visibility, and data that can back it up. Anyone who has been on vacation in recent months will be able to testify that travel is back up and running, the question is which businesses will be best placed to thrive in the new environment.
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We chat to Brett Pentz, Vice President, North America about the US private equity market, portfolio expansion into North America and life in New York. Find out more about a day in the life of Brett and how he's helping our portfolio here:
So, what does a usual day look like for you?
I tend to start my day around 7:00 a.m., local time since most of my colleagues are five hours ahead of me timewise. That means I’m waking up to emails from colleagues and the portfolio, and I usually plan my meetings for the morning, leaving the afternoons for project work.
My work entails lots of market research, such as interviews in specific markets with customers, suppliers and other experts in markets. There is often origination work too, including bolt-on outreach work to potential U.S. targets for the portfolio. My desktop research focuses on trying to clearly size and refine the U.S. market opportunity for companies in the portfolio.
And then, usually at the end of my day I make the time difference work to my benefit a little bit and send a few emails of my own for my colleagues to wake up to. A bit of a dose of their own medicine!
As you are based in the US, it’s helpful you can do lots of those meetings in person. Is the US back to in-person now?
One of the outcomes of the pandemic is that people are a lot more comfortable with virtual meetings and just jumping on a Teams call. That’s good as it means you don’t always need to get on a plane, but there are some things that are just easier to do in person. I’ve started flying more to meet with acquisition targets’ management teams for example. Going to their office, sitting down with the folks that you’re working with, and mapping out that plan together. There is no substitute.
When ECI opened in the U.S two years ago, why did it feel like a logical step for them to bring you on board?
ECI’s portfolio has looked to North America for growth for some time. So, that didn’t start with the U.S office, or me. They’ve been helping their investments to grow into the U.S. or Canada organically or through M&A for years. As that ambition from the management teams they backed scaled, it was pretty clear it would be easier to have someone physically located in the U.S.
It's practically easier for me to jump on a plane, versus someone in London or Manchester. So, if it's to go to a relevant sales and marketing conference, which I'm doing later this month for one of our portfolio companies, or meeting an acquisition target face to face before management might have a chance to get all the way over from the UK. It's just practically easier.
As well as those boots on the ground, I’ve worked in consulting in the U.S., the UK, and Canada, and it really does help quite a bit. I can add some understanding around the nuances of the U.S. market and the Canadian market, versus the UK one, or just help unpick it. That might be state or regional drivers of customer demands or a little more familiarity with relevant regulations in certain sectors. It could be hiring demand, or even making sure the language you’re using is relevant. It’s a familiarity that can add perspective.
Since you’ve joined, have you seen any change in appetite when it comes to US growth?
Absolutely, we’re seeing it come up a lot when we’re meeting prospective management teams now. A big part of their plan is often focused on new geographies, and predominantly that is still the U.S. Even if it’s just an analysis of the opportunity size, I think more management teams want to understand the real potential there now.
When it comes to the portfolio, about 40% of revenue comes from outside of the U.K. and the vast majority of that is from North America. I’d guess about a quarter to a third of the portfolio is now either actively looking to enter the U.S. market or further grow their presence there, so it has certainly kept me busy since I joined!
After the Great Resignation, how are US firms finding hiring at a senior level?
There are a lot of people making moves and certain functions where salaries have just gotten quite frothy. So you need to be prepared sometimes to over-invest in certain key roles. Hiring is definitely a way I can help portfolio companies as I have a network of executive recruitment firms that we can leverage. That means our portfolio doesn’t have to be as reliant on U.K. firms that may not have the same penetration here in relationships with potential recruits. I often also provide a US lens for CV screening. Then lastly, I think there is something about the location, in terms of whether they are hiring in the right location in the first place and how practical is it for the company, that I can provide.
We’ve recently seen a few firms sell to U.S. trade or U.S. private equity. What impact are you seeing U.S. positioning have on exit?
CPOMS was a great example of the impact it can have. It had a dominant market share in the UK school safeguarding software market and started to have a lot of success with international schools. A project we launched was identifying school districts in the U.S. and Canada that were ready to pursue potential pilots. That helped to show the level of interest in the North American market. Which, given there wasn’t much competition in terms of other players, meant we could really highlight the opportunity to potential investors.
It also meant that the U.S. growth plans were really based in reality, giving conviction to the buyer, which on this occasion was a U.S. trade player, Raptor. Showing that early success created something tangible.
Imagesound is another good example. It was much further along in its U.S. growth story, but we did a really detailed piece of analysis across some of the different end markets there. That helped understanding of the next phase of U.S. opportunity, who the key accounts and clients were, and even how they could be approached. That gave the next investor confidence that the numbers in the management plan were well-vetted. But also, here’s a detailed implementation plan that can be done right away on the back of the investment.
Are you seeing more interest now from US trade and private equity?
There is a lot of interest from the U.S. but only if you can show that there’s a real tangible opportunity. Targeting the U.S. opens up a whole pool of buyers and can have a fuller valuation, so it’s an appealing exit route. But buyers need to have full confidence that you can realise the opportunity you’re saying you can.
Are there any projects you’re working on now that are especially exciting?
Always! My role is quite interesting in that I work both as part of the origination team and the commercial team. Both those teams are really joined up anyway, but I provide a bit of extra connective tissue when it comes to US opportunities for the portfolio. And I have been working a lot over the past year with Moneypenny. They did one very successful U.S. acquisition in 2020, and they’ve just completed another acquisition in Alphapage, announced just this week. And there is definitely more to go after there, both in terms of organic growth along with other US acquisitions.
The first area of focus, an example of a typical commercial team project, was to help them clarify their strategic focus and where to invest time and money in business development and marketing efforts for their Moneypenny brand in the US. How much should this mirror the approaches and customer sectors where they have had success in the UK market, and what purposeful differences may be needed for the US market? I looked at what their competitors were doing, and I used desktop research to model the number of addressable customer markets, as well as identifying partners, industry associations, and even building customer lists to target to build a presence.
I think that’s a key area where we can help. The U.S. is a huge market to take a bite out of, so you need appropriate focus to hit the ground running and have success right out of the gate. Don’t waste time trying to tackle it all; focus instead on the end markets with the demand and dynamics that are best suited for your capabilities.
Now and going forward, what the Origination team and I are helping Moneypenny to do is refine that M&A strategy, map the various telephone answering and live chat businesses in the U.S., highlight the attributes that may make them more or less interesting targets, and then creating a prioritised list with which to do some initial outreach. Where we have received interest in this outreach, we have then set up meetings to understand those businesses, their potential fit with Moneypenny, and their own future ambitions and timelines. That means we can present Moneypenny with a well-vetted list of potential acquisition targets to act on as quickly as possible. With two acquisitions now completed by Moneypenny, I expect even more interest from those businesses we contact. With a third of revenues now being generated in the US, Moneypenny is now one of the few providers of scale in the US as that market only gets bigger.
So, last question, where would be your favorite place to spend a weekend in the whole of the United States?
Oh, a weekend. Because it's summer right now, and the time of year impacts my answer to this question, my absolute favourite place to visit and to have lived in, was Chicago. I mean I'm always trying to subtly nudge our portfolio companies to consider offices in Chicago or the attractiveness of the Illinois market! So far, I haven't been successful in that, but I have just been to a conference on behalf of Peoplesafe in Chicago, which was fantastic.
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Moneypenny, a leading provider of answering services, outsourced switchboards, Live Chat and outbound calls for small and large businesses, has further extended its services in the US with the acquisition of Alphapage.
Alphapage is an award-winning communications company that provides bi-lingual (English and Spanish) call management solutions to businesses of all sizes. Alphapage ensures businesses run smoothly 24 hours a day, 365 days a year. They blend unsurpassed customer care and industry expertise with the high-efficiency of today’s telephone and web-enabled technology to provide exceptional service. The company was founded by Joe Bean in 1989 and is based in Denver, Colorado.
Following the acquisition of VoiceNation in 2020, Moneypenny is the market leader and fastest growing company in its sector, with over 1,200 staff in the UK and US. It delivers outsourced telephone answering, live chat, switchboard and a host of technology-enabled services to a wide range of businesses, from sole traders to multi-national corporations. Moneypenny handles 20 million calls and chats annually for more than 21,000 clients in the UK and US.
We invested in Moneypenny in 2018 to accelerate their ambitious growth plans and this latest acquisition will result in a third of group revenues being generated in the US. Moneypenny remains highly acquisitive with the business seeking to supplement strong organic growth with strategic M&A. Demand for Moneypenny’s services is growing at a significant rate as businesses continue to look at ways to improve how they interact with customers, and to maximize operational efficiencies.
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Zenergi, the energy and sustainability services provider backed by ECI Partners, has welcomed Powerful Allies, a leading provider of 100% renewable electricity contracts for schools and businesses, into the Zenergi family.
Powerful Allies was founded nearly 10 years ago by James Robson, who wanted to “make things better” and be a truly trusted partner for clients needing energy supply support.
Powerful Allies currently supports a number of customers in different sectors, including over 130 leading independent schools and 170 single and multi-site Academies across the UK, providing services including energy cost and carbon emission reduction strategies, energy consumption monitoring and reporting, and LED and Solar PV solutions.
The acquisition of the business is fantastic news for Zenergi and is the second acquisition undertaken following our investment in Zenergi in February 2022. In March the business acquired DB Group, enabling Zenergi to grow its regional presence and support customers in Scotland.
Powerful Allies will continue to trade under its own brand as part of the Zenergi group for the immediate future.
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We're delighted to announce the successful sale of Bionic, the leading marketplace in the UK for SME services, to OMERS Private Equity, generating a return of 4.8x following a five-year partnership.
Bionic is the smart way for Britain’s SMEs to sort their business essentials such as energy, connectivity, insurance and finance. Their tech-enabled experts make life easier for small business owners, removing the faff and saving them time and money.
Bionic successfully made six acquisitions during our investment and it will continue to deliver on this buy and build strategy with OMERS to further expand its capability and offering to customers. ECI partnered with Bionic in 2017 when it was still called Make it Cheaper. Since then the business has significantly transformed; rebranding to Bionic, building out product offerings, increasing routes to market and investing in market-leading digital propositions and technology. The team has also continued to build on their fantastic employee experience, with Bionic achieving a successful 7th place ranking in the Top 100 Best Companies to Work For.
This is ECI’s 10th exit in the last 12 months, delivering an average return of 4.2x and £1.3bn of proceeds.
M&A: Houlihan Lokey
Finance and Tax: EY
Legal: Addleshaw Goddard
Commercial DD: PwC
Political and Regulatory DD: WA Communications