Building a Global Leader in Corporate Expense Management Software and Solutions
Background
As companies, universities and government agencies increasingly spend more on IT, they are looking for ways to make sure that money is spent efficiently. Sumeru Equity Partners was doing thematic work in software for corporate spend management and was attracted to Phoenix-based Telesoft because of its long-standing customer relationships, large global market opportunity and entrepreneurial spirit. The company provided a unified expense management platform for telecom and data spend. The founder had a personal connection to the Sumeru team, and he selected us based on our track record in scaling enterprise software companies and a partnership approach that keeps the focus on growth.
After acquiring Telesoft, Sumeru merged it with a U.K.-based business and renamed the combined entity MDSL. The merger led to the hiring of a new CEO and management team and put the company in a strong position for international expansion and the development of new products.
Value Creation
Scaling the New Enterprise
SEP partnered with the new management team to accelerate growth and optimize sales, product, and operations. One early area of focus was improving the customer onboarding process to accelerate time-to-value in new client relationships. Sales and marketing functions were scaled to give the company a stronger global presence, resulting in increased lead generation and better sales pipeline management. The company increased its managed services productivity by automating manual processes. Product innovations enabled the company to enter adjacent growth markets such as Cloud Expense Management.
We helped recruit a CFO, Chief Operating Officer, and leaders for Sales, Account Management and Project Management. Sumeru also recruited a seasoned telecom industry executive as a board member, which expanded the company’s CEO/CIO network in targeted end-markets.
Results
Growing Margins and Revenues
Over the period Sumeru held and worked closely with MDSL, its revenues grew at more than 40% compound annual growth rate. Automating MDSL’s invoice processing and adapting the company’s business model led to increases in gross margin and EBITDA. As the SEP team made substantial investments in the company, it brought on new employees and saw its total addressable market grow significantly.
In 2019, Sumeru sold a majority stake in MDSL to another private equity firm, who merged it with Calero to create Calero-MDSL. Sumeru retained a minority stake in the merged company.