Exited

Acumatica’s story

The Only True Cloud ERP Platform and its First Investor

“Almaz played a critical role in Acumatica’s development through multiple stages, from providing A-round capital at a point where other firms didn’t necessarily see our vision, to providing CEO/CFO coaching on many topics,  Almaz participated in subsequent round, wa always a thoughtful and balanced participant at board meetings, and then as a key provider of input into the negotiation terms that led to the sale of Acumatica to EQT – I don’t think a CEO could ask for a better partner” Jon Roskill, CEO, Acumatica.

What is Acumatica in a nutshell?

Headquartered in Bellevue, Washington, US, Acumatica is a fast-growing software as a service (“SaaS”) company, serving customers with true cloud Enterprise Resource Planning (“ERP”) solutions. Through its ERP platform, Acumatica helps customers streamline and automate processes, manage and control inventory in real-time and increase productivity. The Company’s software is delivered via the cloud and is accessible from any location, on any device.

History, masterminds behind the company and how did they come up with the idea?

Mike, Acumatica’s CTO, is one of the founders of Acumatica and recalls how it all began: “It [Acumatica] started with a few people; it was about five or six guys from Parallels. We were developing a platform for the next generation billing solution and we believed this technology was well suited for the ERP market. So we had a discussion with Serguei Beloussov and John S. Howell, Jr. and decided to create a split company from Parallels and founded a new company to focus on ERP software.”

Between 2008 and 2010, the company now known as Acumatica really began to develop its cloud ERP platform. The initial billing system they created is now our current Financial Management module.

In early 2009, Ali Jani (VP Partner Strategy, Product Management, and Services) joined the team with his extensive ERP experience. He points out that when Mike, Andrew Boulanov (Chief Architect), and their team were developing the platform, they had no existing ERP customers at the time. This turned out to be a major plus as they didn’t need to worry about the technology supporting migration of existing customers. Instead, they were able to do what they wanted and used modern, cloud-based technology that seized the opportunity of a transition in the market.

“When I joined, I did a lot of due diligence with my background being ERP. When I evaluated Acumatica, I recognized that the technologies were fresh, and it was purpose-built for the cloud. That was a major differentiator; the technology was really picked up at the right time, not technology of decades ago,” Ali says. “We recognized ourselves as being a platform company. It’s in our roots to build something that was going to last a lifetime; people don’t frequently switch ERP systems and they’re really buying the system for the future, not just for what they do today.”

In 2014 Jon Roskill was brought in as CEO after 20 years at Microsoft to drive the company to the next level of scale. Over the next 5 years Acumatica grew to more than 5000 customers, expanded the network of partners and international distributors, driving revenue and visibility growth which is what ultimately caught attention of aquirers.

What is the unique factor that sets Acumatica apart?

Acumatica’s successful journey is largely due to our VAR, ISV, and OEM partners.

“John Howell really believed in the channel. Everything that we did from day one was not about adding sales teams or doing direct sales. We recognized the platform and the power of the platform can only be exposed if we have people who want to leverage the platform, to build products and adapt the ERP solution for their end customers,” Ali says. “We can’t be experts in every vertical and we needed the partner channel to help us with their domain knowledge and expertise to leverage the platform, build customizations, and use our tool sets to deliver solutions.

“It’s a team of people who are very committed, and one reason for our success is that we stick together. We’ve been very lucky with finding the right people over the years. Altogether, we’ve been an excellent team,” Mike says.

Another unique factor that sets Acumatica apart is that over 70% of our resources are in technical roles. We embrace technology here at Acumatica and were the first to do things such as Amazon Alexa integration. We invest in feature enhancements not just product maintenance and are excited about the future as AI and Machine Learning really take shape. The possibilities are endless.

Relationships with Almaz

Since initial investment in Series A in November 2009, Almaz supported the company though 4 subsiquent rounds led by Visma, MYOB and Accel-KKR.

“Almaz Capital was the first ever investor in Acumatica back in 2009, – Alexander Galitsky, Managing Partner of Almaz Capital, said. -The vision of Acumatica founders and the beauty of cloud-offering gave the opportunity to implement the optimization of business processes through ERP in the new industrial verticals over the globe. We have always believed in the success of Acumatica and have been more than happy to support and work with the team in the past 10 years.”

Role of Almaz conducing company’s development?

Almaz had a board seat since the initial investment helping the company on all stages providing critical support as first institutional VC (helped with follow on fundraising, corporate governance, recruitment), product review and engineering team structuring.

Alexander Galitsky has been the board member until the company reached larger scale, when Charles Ryan, focusing on later stage companies in Almaz portfolio took over the board seat to execute the acquisition.

“Almaz played a critical role in Acumatica’s development through multiple stages, from providing A-round capital at a point where other firms didn’t necessarily see our vision, to providing CEO/CFO coaching on many topics,  Almaz participated in subsequent round, wa always a thoughtful and balanced participant at board meetings, and then as a key provider of input into the negotiation terms that led to the sale of Acumatica to EQT – I don’t think a CEO could ask for a better partner” – Jon Roskill says.

Acquisition story

The EQT fund has entered into agreements to acquire Acumatica on June 19, 2019.

Johannes Reichel, Partner at EQT Partners and Investment Advisor to EQT VII, commented: “Acumatica perfectly fits EQT’s thematic investment approach and will strongly benefit from EQT’s long experience in developing companies in the software sector. The transaction also forges a strategic relationship between Acumatica and IFS – two of the fastest-growing ERP vendors globally. These two companies are best-in-class challengers and together they are well-positioned to serve the entire ERP market, from small and medium, all the way to large enterprises, on a global scale. EQT is very excited to back Jon and the greater leadership team at Acumatica.”

Jon Roskill, CEO of Acumatica, said: “This move provides exceptional validation of Acumatica’s market execution and growth in the last several years.”

Looking forward

Acumatica will continue to operate as an independent company, led by CEO Jon Roskill, with a focus on accelerating its strong growth momentum, customer satisfaction and channel-only go-to-market strategy.

Jon Roskill said: “Greater investment from EQT will unlock new opportunities for us to better serve our customers and secure a stronger future for Acumatica. To compound this potential, is the access to, and collaboration with, ERP industry leader and fellow EQT portfolio company, IFS.”

Acumatica and IFS will operate as sister companies, serving the market with complementary cloud ERP solutions. Acumatica will focus on small to medium sized businesses while IFS will continue to focus on larger enterprise customers. The two companies are expected to benefit from cross-pollination of R&D capabilities and a synergistic geographic and end-market footprint.

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