ECI is a growth focused investor, looking to back high quality management teams in businesses that are well positioned in growth markets with resilient business models. This combination of growth and resilience is often found in businesses with technology at their heart, whether they be platform businesses that sell and service a product using their technology, or businesses that use technology to effectively leverage and scale their proposition. The ability to deliver highly scalable growth, service a large customer base efficiently, continually innovate and generally charge on a recurring or subscription based revenue model is what makes these tech-enabled companies attractive to ECI and why we have had a large number of successful investments in this space.
An excellent example from our past portfolio is CarTrawler. CarTawler connects car rental suppliers to consumers, directly and via third-party websites, all through its award-winning booking engine. Consumers can access real-time prices and availability in 30 languages, across 30,000 locations in 174 countries from more than 800 suppliers. This technology benefits CarTrawler’s distribution partners, which include online travel agents and airlines, by enabling them to drive ancillary revenues and improve customer conversion. The car rental suppliers also benefit from the global distribution model and incremental volumes. ECI recently exited Cartrawler, earning 6x money.
Encore Tickets, the leading multi-channel ticket aggregator focussed on the West End market, is a more recent investment and has similar dynamics to CarTrawler. A big attraction of this business to ECI was the potential for further growth that its technology platform offers. The business operates both B2B and B2C distribution models, leveraging its platform to do so and ECI is supporting Encore to continue to develop its technology during our investment.
At the other end of the tech-enabled spectrum, there are business services companies that have developed or are developing proprietary technology that they can leverage to accelerate their growth rate and increase their profitability. In 2014, ECI delivered a 3x return on the exit of XLN, a fully tech-enabled services business that provides high-quality, low-cost telecom services to SMEs via its own proprietary technology platform. It was its technological capabilities, along with a strong management team, that attracted ECI to this business when we invested in 2010.
Technology platforms enable these businesses to offer more cost effective services, giving them both a competitive advantage on pricing and higher margins. Tech-enabled businesses are highly scalable and their customer base can become increasingly broad as the company scales up. They can also sell in additional products and services to their existing customer base and can lock in more contracted and recurring revenue through subscription models, making them more resilient businesses.
ECI is interested in businesses at all stages of the tech-enablement journey and is experienced in supporting our portfolio companies to become more tech-enabled during our investment. In 2012, we invested in Citation, a provider of health and safety and employment law services to SMEs. It delivers its services via a combination of its online platform and 64 legally trained operators. ECI recognised the potential to develop the existing platform further. Following our investment in the business, we introduced a specialist from our network and he has since become the first CTO at Citation.
In summary, wherever your business may be on this spectrum and however far along the tech-enablement journey you are, ECI recognises the many advantages of tech-enabled business models, has vast experience of investing in and supporting the growth of such businesses, and is interested in finding more tech-enabled businesses to partner with in the future.