Times’ Business Heroes in association with BGF
The UK boasts many of the most innovative and fast-growing businesses in the world. Collaborating with The Times and The Sunday Times, BGF is uncovering some of their stories to salute our British Business Heroes. These are the stories of the business owners and entrepreneurs running successful companies, creating valuable employment and driving the UK economy. Click on the link below to take a look at their video stories and also watch an introduction by Stephen Welton, CEO of BGF.
Other BGF portfolio companies featured include:
Regional Director – South
Paul joined BGF in May 2011 and heads up our South West and South Wales region, covering the South West of England, Berkshire, Hampshire, Oxfordshire and South Wales from offices in Bristol and Reading. As well as working on new investment opportunities in the region, he currently sits on the board of four BGF investee companies and is a member of the BGF national Investment and Executive Committees.
Prior to BGF, Paul worked as a private equity investor for 16 years with 3i and LDC and also led Grant Thornton’s South West Corporate Finance advisory team as Partner for six years. He qualified as a Chartered Accountant with KPMG in Manchester and holds a First Class Degree in Economics and Accounting from The University of Sheffield.
“I joined BGF on the day we launched – the opportunity to create a new and unique investment business focused on helping SMEs to grow was both exciting and challenging. It is great to see that our supportive, long-term approach to funding and supporting ambitious management teams is in demand. We are achieving two of our key objectives – helping exciting private companies to grow, and increasing the size of the equity growth capital market in the UK. We will continue to invest in our regional team to enable us to work with many more ambitious companies.”
FUNDING SALES & MARKETING
“We call it the ‘ugly duckling syndrome’,” says Sarah Wood, Chief Operating Officer and co-founder of Unruly, a London-based company that is one of the world’s leaders in social video campaigns. “Businesses like ours reach a stage where they’re no longer a fluffy chick start-up, but nor have they become a Google-like beautiful swan – yet they still have to compete against both of them.”
It’s a common theme amongst successful business founders and entrepreneurs. If getting the business off the ground was difficult, making the leap to scale and global reach can be even more challenging and nerve-wracking. One of the biggest problems is that building a sales and marketing infrastructure capable of acting as a springboard for that leap requires financing and specialist expertise. Growing businesses are often short on both.
At Unruly, founded in 2006, the business had reached a critical moment by 2011. “We’d run almost 2,000 campaigns but when you hit a certain size it feels uncomfortable to start taking even bigger risks without a cash cushion on the balance sheet because there are inevitably going to be problems to overcome at some stage,” says Wood. Unruly had made a big splash in New York but was desperate to open an office in Chicago, while also needing to get a Berlin presence up and running and move into Asia. “Geographical footprint is so important when you’re dealing with Fortune 100 companies,” says Wood. “The trouble is it takes the same investment of time and money for a business like us to open new offices and subsidiaries as it does for a huge multi-national, but they have much greater resources to play with.”
To make matters worse, time was pressing. “We knew organic growth wouldn’t be quick enough,” Wood adds. “There were no market leaders in the US or Germany, so this was a real window of opportunity.”
It was at this stage Unruly began negotiations with BGF. “We considered other types of financing, including debt, but we wanted backers whose interests were aligned with our own,” Wood explains. Tim Whittard, a BGF investment director based in Birmingham, says the sort of growth capital Unruly sourced is perfect for growing companies that want to develop sales and marketing with the aim of taking the business to the next level. Such companies need new people, as well as infrastructure that may range from scalable IT platforms to physical property, but none of this spending generates an immediate guaranteed payback.
“Investment in sales and marketing is all about preparing the ground for growth but it is cash-burning and speculative – you’re just not going to be able to raise debt to support that,” Whittard argues. “In any case, even if you could fund these investments with debt, there are good reasons not to: with an equity partner, and particularly with BGF, you’ll also get commercial support, including a presence on the board, and hugely valuable access to networks of useful contacts.”
This was exactly what Richard North, chief executive of toy development company Wow! Stuff, was looking for when his business reached critical mass. “We were making good money but we were also aware there was a ceiling,” North recalls. “As an entrepreneur, you always wonder if you could do something really big, but you also have a fear of failure, and we felt we’d reached a crossroads – that if we were really going to go for it, which we had the ambition to do, we’d need help.”
Wow’s discussions with BGF were completed over the course of a few weeks early in 2012, securing a £4.8m investment in the company. North wanted the cash to fund an Asian office that would oversee local production and quality control, to fund expansion into the US and to beef up product development, but the arrangement was not simply a financial one.
“Running a business is lonely – very often you don’t even know what it is you don’t know,” North says. “With BGF, we’re in it together and I’ve come to see that as just as important as the money they’ve provided – more so really.” Not least, they have introduced an exceptional non-executive director to the company with toy industry experience at the highest level, whose networks have already helped Wow to move closer to mass market volumes.
Software business Celaton has also been in recruitment mode since securing a £2.5m equity investment from BGF in January 2013. “The difference this money has made to us is that we can invest in the right people to go for growth,” says Celaton’s chief executive, Andrew Anderson. “Good sales directors and marketing directors don’t come cheap and we’ve already made some fantastic hires.”
However, Anderson points out that development of sales and marketing requires more than just additional people. “It is also about the effort that goes into marketing and sales; BGF encouraged us to spend three months conducting some good old-fashioned market analysis that we’d simply never had the resources for in the past,” he says. “You can waste an awful lot of time and money doing the wrong things and that analysis is already providing us with some priceless intelligence.”
Anderson did at least consider other sources of finance when he realised Celaton’s growth potential was being curtailed by its lack of capital. “Our bank was very supportive, but it brought out its standard lending models and we just couldn’t get the boxes ticked,” he says.
Celaton also held talks with several other equity investors before settling on BGF. “They were only interested in a minority stake, but, also, they were prepared to work with us,” he says of the decision. “With the venture capital firms we met, we always felt we were working for them – they gave short notice of meetings, for example, and were hugely demanding about the information they wanted and then their key people wouldn’t turn up.”
In the end, it’s the relationship that matters most, says BGF’s Tim Whittard. Sales and marketing investments require patience – and while they’re waiting to see those dividends start flowing, both investor and investee have to be able to work together constructively.
“My personal checklist when I’m thinking about whether a company has investment potential starts and stops with my assessment of its management – and its CEO in particular,” Whittard says. “He or she needs to be genuinely looking for a partner rather than being solely focused on the money – the chemistry is hugely important given that we’re going to have such a long-term relationship.”
Benefex appoints new Chairman
Benefex, a leading provider of online employee reward and benefit schemes, has announced the appointment of Steve Bellamy as its Chairman. Steve will replace the current Chairman Peter Waller who in turn will become Executive Director in order to continue assisting with the growth of the business and managing on-going client relationships.
Steve’s extensive experience in assisting high growth companies, predominantly in the IT sector, will help Benefex to deliver its strategic objectives as it moves to develop its service offering, build upon its impressive client base and extend its international presence.
Benefex operates in a high growth sector, enabling large organisations to tailor their rewards and benefit packages to individual employees, communicate effectively online with staff, and outsource administration and support of their schemes. As one of the largest online employee reward and benefits providers in the UK, Benefex currently provides services to over 500 clients, managing online benefits schemes for over 1 million employees in more than 40 countries. Its clients include the AA, Coca Cola, Bank of America Merrill Lynch, De Beers, E.ON, Philips, MTV and Centrica. It operates from its head office in Southampton, with a further presence in Marlow and London.
Steve has over 25 years’ experience in both managing and investing in high growth businesses. He has held a number of other Chairman, Non-executive and advisory roles, mostly in the technology industry. He is currently Chairman of Becrypt Limited, a cyber-security technology specialist, a Non-executive Director of Advanced Medical Solutions Group plc, a UK quoted global medical technology company and CEO of Accretion Capital LLP, a specialist European technology fund management business launched to capitalise on emerging technology opportunities in Europe.
Steve has also held a number of executive roles in his career, including Chief Operating Officer and Finance Director for Sherwood International plc, a UK listed global technology business focused on the Insurance industry and UK Central Government. Prior to joining Sherwood, Steve was a UK Investment Director of Brierley Investments, a global investor in undervalued quoted companies and before that worked at Coopers & Lybrand (now PwC) in New Zealand and New York. He trained as a Chartered Accountant in New Zealand.
Steve was introduced to Benefex by Business Growth Fund (BGF), a company established to help Britain’s fast growing smaller and medium sized businesses by providing long-term equity investment. In October 2011, BGF marked its first deal when it invested £4.2m of growth capital in Benefex. As part of its investment offering, BGF seeks to contribute guidance and operational support to its investee companies and identified Steve as a highly regarded individual who would be a significant addition to Benefex’s Board.
Matt Waller, the CEO of Benefex commented:
“I would like to take this opportunity to welcome Steve as our new Chairman. As a result of BGF’s investment and our own excellent reputation within our industry, we have secured a first rate Chairman and we look forward to making the most of Steve’s extensive experience of high growth, exciting and entrepreneurial IT companies going forward. It is exciting to have Steve on board whilst retaining Peter, who will remain actively involved in the business in sales and client management. It’s the best of both worlds!”
Steve Bellamy commented:
“Benefex is exactly the type of business that I enjoy working with and also the sort of company that will help drive the UK economy forward. It was a start-up just eight years ago and is now one of the UK’s largest online employee reward and benefits providers with an exemplary client list and range of products and services. I look forward to working with Matt Waller and the rest of the management team to maintain Benefex’s impressive growth path.”
Benefex hat-trick at 2012 Employee Benefit Awards
Benefex has won 3 accolades at the 2012 Employee Benefit Awards for their work with Kraft Foods
Benefex have won three accolades at the 2012 Employee Benefit Awards for their work with Kraft Foods. The announcement was made at a ceremony held at the Royal Artillery Gardens on the 31st May in London. Benefex, who were nominated for 4 awards at the ceremony, were named the winners in the following categories;
- Best use of a Flexible Benefits Plan
- Best Communication Strategy for an organisation with over 5,000 employees
- Benefits Team of the Year (Kraft Foods Team – entered by Benefex)
In addition, Benefex received a Highly Commended in the Best Communication Strategy category for their work with E.ON.
Matt Waller, Benefex CEO, commented:
“The team here at Benefex are absolutely thrilled to have won not one, but three awards this year. It is a pleasure to work with both Kraft Foods and E.ON and it is great to be recognised by our peers in the industry for everyone’s hard work and innovation”.
In October 2011, BGF made its first ever investment when it backed Benefex, a leading provider of flexible, online employee reward and benefit schemes. BGF initially invested £4.2m for a minority shareholding in the business.
Benefex enables large organisations to tailor their rewards and benefit packages to individual employees, communicate effectively online with staff and outsource the administration and support of their schemes.
Since BGF invested, Benefex has continued to expand, doubling turnover to £10m in 2015. The business has also trebled its headcount in the period and now employs over 160 staff across its two offices.
BGF’s investment has enabled Benefex to continue the development of innovative solutions, expand its product and service lines and invest in its new auto-enrolment tool for businesses of all sizes. In July 2012, BGF also introduced Steve Bellamy as Non-Executive Chairman to the business, bringing with him over 25 years’ experience in both managing and investing in high growth businesses.
Due to continued growth in the business, BGF committed a further £1.3m to Benefex in December 2012.
The company is led by Matt Macri-Waller, a 37-year-old entrepreneur, who started the business from his own home when he was just 25, and he has grown it to become one of largest online employee reward and benefits providers in the UK. Its clients include the Marks & Spencer, Mondelez, AA, Bank of America Merrill Lynch, De Beers, E.ON, Philips, MTV and Centrica. It operates from its head office in Southampton, with a further presence in Marlow.
The market in which Benefex operates is enjoying rapid growth. Many employers are looking at how best to attract, retain and motivate their staff and recognise the value of flexible rewards and benefits packages that can be tailored to the needs of the individual. These arrangements are often complex, particularly for large companies, which in turn is driving demand for outsourced services.
Service providers which offer technological support are outperforming the market, growing at twice the rate at some 20%. This is due to an increasing need for technological support, use of online and intranet services and imminent legislative changes.