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Thursday 27 February 2020

Low code takes Netcall to new customers and places

logoLow code continues to be the driver for Netcall and now represents a third of overall revenue, having achieved 21% growth in the six months to 31 December 2019, compared to 9% growth across other solutions (although growth here shows that all product lines are moving ahead). Overall revenue expanded a comfortable 13% to £12.3m, which also reflects the change in the business model as Netcall continues the shift to SaaS, lifting adjusted EBITDA by 5% to £2.12m.

Developing the low code side of the business is one of Netcall’s four strategic priorities. The numbers reflect the level of progress but a conversation with the management team reveals some of the deeper level impacts. Low code is the main driver for new customer wins; beyond this it is enabling Netcall to engage with organisations it would not previously have been able to. It is also opening up cross and up sale opportunities, as illustrated by wins with Dreams and Hampshire Trust Bank.

H120 also saw progress on another of Netcall’s priorities – the development of its fledgling partner ecosystem. It now has 9 partners – from local niche players to global SIs such as CGI– and during the quarter indirect revenue contributed c.20% to the total. Partner revenue is expected to be a significant part of Netcall’s revenue stream and key to its plans to scale and expand internationally. It is building assets to make it easier for partners to engage such as the new Managed Service Partner programme. Further partner ecosystem investment is very much on the cards. 

There is more to Netcall than its low code offering – it is just one part of the Liberty platform and there have been other developments such as the launch of the Connect cloud messaging and bot platform and a community hub. Indeed, locating it within a broader platform provides context that no doubt helps establish relevance and adoption.

Posted by: Angela Eager

Tags: results   software   low-code  

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Thursday 27 February 2020

Sophos deal hits 'bump in the road'

SophosCycleIn Oct 19 we reported on the £3.1b take -private of Sophos by Thomas Bravo. This was all meant to have been done and dusted by now. But, late yesterday, the deal hit a bump in the road. It was discovered that a UK subsidiary of Sophos had a perk enabling it to finance the purchase of bicycles for employees as part of HMGovt’s ‘Cycle to Work’ scheme. Any company providing finance in excess of £1000 must be registered by the FCA. Sophos was not.

The consummation of the deal has been put on hold so that the FCA can be notified and the situation resolved. So trading in Sophos shares continues until further notice.

Disclosure - I had bought into Sophos on their IPO. But I sold in Oct 19 the moment the Thomas Bravo deal was announced. I did that because the price was fixed in $ - not £. Since then the £ has strengthened against the $ (due mainly to the General Election result). So, as it turned out, that was a pretty astute move!

Posted by: Richard Holway

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Thursday 27 February 2020

BGF helps AND Digital get hairy and audacious (no, seriously!)

logoNow listen carefully. Its people are called ANDis. Each ANDi is part of a small, tight-knit team called a Squad.  Six Squads, with some specialist roles and a leadership team, is called a Club. A Club is a unit with no more than 80 ANDis, who together serve between 8-12 different clients.  Each Club has its own physical space – a Club House – with its own management team. Supporting the work of each Club is a multidisciplinary team at Club Tenzing (Ed’s note: not up Everest, but in Covent Garden).

Get it? Got it! Good!!

This is Maidenhead-headquartered digital agency, AND Digital, whose website is so excitable I had to have a little lie-down after reading it.

Established in 2014, AND Digital claims to employ over 600 people and have an annual turnover of £42m. That’s a pretty massive jump from the 280 people on the books in 2018, when AND Digital reported revenues of £27.7m and net losses of £282k.

Clearly BGF is a believer as they have sunk £11m into AND Digital, to help founder Paramjit Uppal achieve his “2025 BHAG” (‘big hairy audacious goal’).

I think I need another lie-down.

Posted by: Anthony Miller

Tags: funding   startup  

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Thursday 27 February 2020

Frog hops into SHE Software to give funding bounce

logoMore exciting news from East Kilbride-based health and safety software developer, SHE Software, which has just completed a £7m Series B funding round led by Frog Capital, with existing investors Northern Venture Capital Trust (VCTs) Funds at Mercia Fund Management also participating. Just a couple of months ago, SHE Software announced a £1.4m R&D grant from Scottish Enterprise (see Minister’s visit marks funding boost for SHE Software).

SHE Software is one of the many UK tech SMEs supported by our very good friends at corporate advisory team, ScaleUp Group; indeed ScaleUp Group member – and prolific entrepreneur –  Martin Fincham also chairs SHE Software (see SHE Software in rude health with new chair).

According to CEO Matthew Elson, SHE Software increased order intake by 54% last year, securing 80 new customers. Besides developing further its business in UK and Continental Europe, the new funding will help accelerate growth in North America and Australasia.

Onwards, upwards and outwards!

Posted by: Anthony Miller

Tags: funding  

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Thursday 27 February 2020

Revolut secures $500m to fund global push

RevolutLeading UK fintech, Revolut, has successfully raised $500m in Series D funding. The latest investment was led by Technology Crossover Ventures (TCV) and contributors included GP Bullhound and Manhattan Venture Partners.

Founded by its Ukrainian CEO, Nik Storonksy, Revolut provides a range of banking services, including payment cards, currency exchange, and P2P payments. The company also supports retail purchases and cash withdrawals in an array of currencies. Revolut claims to have so far attracted around 8m customers worldwide and has at least 250k active daily users.

In October it was reported that Revolut was seeking a massive cash injection to help it to accelerate its global push (see: Revolut seeks $1.5bn to supercharge global expansion). The fintech is in the process of taking its offering to an even broader international audience off the back of its expanded relationship with global payments giants Visa and Mastercard (see: Revolut finds room for Mastercard amid global expansion).

Revolut continues to work hard to enhance its global scale by securing early mover advantage in new markets. This strategy has been successful so far, with strong growth pushing annual revenues to £58m. However, losses at Revolut have doubled to $33m and profitability appears to remain tomorrow’s problem, whilst investors are happy to fund the land grab.

Posted by: Jon C Davies

Tags: funding   FinTech  

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Thursday 27 February 2020

Coronavirus give short term boost to remote-working

Will it prove a tipping point?

Early on Monday morning I reported Coronavirus spooks markets.  NASDAQ is down 6% this week and the FTSE100 down 4.9%. Falling still further this morning. These are ‘big numbers’ and a lot of investors (like me!) must be feeling the pain. Given the acres of coverage on the Coronavirus issue, one can only conclude that things can only get worse.

Home workingAs I told readers, I spent the half term with our ‘Little Ones’ in Venice. Although not in a ‘lockdown’ area HMGovt have instructed us to self-isolate if we show any symptoms. So far, so good! Although self-isolation would be a major inconvenience, workwise I would function as normal. Same applies for the rest of TechMarketView.

Back in 2009 when TMV was founded, Anthony & I worked from our homes - like almost every other start-up. As we added to our team, they did likewise. Indeed we built remote working into all our technology. Everything we do is in the cloud. We have no ‘on premise’ TMV-owned technology. Everyone is responsible for their own laptops, mobiles etc. 11 years on, with a sizeable workforce, we are still a 100% remote/home working company and have no plans to alter that situation.

I say all this because the spread of the coronavirus is forcing many companies to send employees to work remotely/at home. Yesterday, OMD in the UK told 1000 staff to work at home as an employee returning from Australia felt unwell. Chevron in Canary Wharf sent 300 people home. The list of other companies taking similar action is now significant.

A recent report showed that before coronavirus only 5% of people worked from home for the majority of their time. Although over 60% work from home sometimes. Those figures are bound to increase dramatically in the short term. Tech companies that aid remote working - like Slack, Zoom, Microsoft (Team) - have seen significant increases in the downloads of their software in recent weeks.

TMV has seen great advantages in home-based working. Flexibility is greatly treasured by our people - particularly those with young children - resulting in high staff retention. Time spent commuting is saved. TMV clearly has a much lower cost base as a result so we can pay higher bonuses. Working from home does not, of course, mean working at home all the time. The exact opposite. TMV people attend meetings with clients and the companies we analyse almost everyday.

But I’ll be the first to admit that home working has its drawbacks too. Social interaction is vital and we have to work hard to compensate with regular physical get-togethers and encouraging a lot of ‘cyber-chat’ too. Perhaps the greatest downside is the difficulty - actually the impossibility - of recruiting trainees. You really can’t recruit a graduate straight out of university to work from home. Most ‘on-the-job’ training is done by sitting next to a more senior colleague. Difficult when you are working from a spare bedroom at home!

And, of course, many occupations, like the NHS, care homes, labourers, hospitality etc., cannot even contemplate remote working.

It will be interesting to see whether the obvious short term increase in remote working, because of the virus, tips the long term balance in favour of home working. My bet would be that it will.

Posted by: Richard Holway

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Wednesday 26 February 2020

UiPath appoints new UK head

UiPathNew(ish) head of EMEA for robotic process automation (RPA) vendor UiPath Gavin Jackson, has put in place Chris Duddridge as new MD for its key UK and Ireland market.

Chris DuddridgeDuddridge has been with UiPath for a year and has been promoted from EMEA sales director, having grown a regional sales team operating across the UK, Benelux and DACH regions, as well as in the Middle East and North Africa. Prior to UiPath Duddridge spent six years in ERP sales roles at Deltek.

The UK remains one of the most advanced and mature RPA markets globally and is a key battleground for the big three players, Blue PrismAutomation Anywhere and UiPath, so will be hoping new leadership will help accelerate adoption here.

Posted by: Marc Hardwick

Tags: leadership   RPA   UiPath  

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Wednesday 26 February 2020

Unit4 points to "breakthrough year"

Unit4 logoUnit4’s CEO Mike Ettling (appointed in April 2019) has pledged to increase openness around the Group’s performance (see Unit 4: A glimpse into cloud performance). As a result, the provider of enterprise cloud applications for ERP and CRM has released selected financial data for its last financial year.

At the top-line, revenue growth stood at 5%, with revenues reaching $412.8m. This will have included acquisitive growth from the purchases of talent-enablement solutions provider, Intuo (see Making HR conversational: Unit4 acquires Intuo), and small Netherlands-based provider of accountancy and fiscal software, JSKS; however, Unit4 management states that the underlying organic performance was positive.

It is the “record cloud growth” that leads Unit4 to describe the period as a “breakthrough year”. Underneath the covers, the company reveals 25% growth in subscription cloud revenue to $92.2m. In addition, while total bookings grew 14% year-on-year, cloud bookings growth was up 20%.

Accelerating Unit4’s transition to the cloud has been a key focus for Ettling since his arrival. He has refreshed the leadership team, bringing in people with cloud experience, invested in people, refreshed the brand, and made clear Unit 4’s raison d’être; its aim is to deliver a better “people experience” for service-oriented organisations as they seek to meet the requirements of a changing work environment.

Specifically, Unit4 highlights accelerated growth in North America and the Nordics, as well as strong order growth in the Professional Services market globally. Key mid-market customer wins include those with a UK footprint like Expleo (integrated engineering, quality services and management consulting for digital transformation), which is taking on Unit4 Business World capabilities, and LoopMe (international marketing advisory), which is taking advantage of Intuo’s offering.

Ettling’s ambition is clear: to accelerate the transition to the cloud and, more broadly, put “rocket boosters on (the company’s) growth plans”. What’s apparent is that some areas of the business (across professional services, higher education, public services, and not-for-profit) are having an easier time than others. The company’s CTO for Galileo Global Education comments that “scaling our education network will be a significant undertaking, especially given the competitive landscape we operate in”. It’s early days for the journey but, for Ettling to reach his ambitions, he must ensure the business is firing on all cylinders.

Posted by: Georgina O'Toole

Tags: results   erp   cloud  

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Wednesday 26 February 2020

Unisys looks to the future with work to do

UnisysUnisys, the security-centric US technology provider, has announced full year results reflecting a second consecutive year of growth, contrasted with a slump in profits. The company reported annual revenues for the period ended 31 December, up by 4.4% to $2.95bn, with services revenues up 7% to $2.55bn. However, despite the improving revenue picture, the Pennsylvania, based company recorded a full year net loss of $17.2m, compared to a 2018 profit of $75.5m.

Growth in the US was strong at 25% year on year and matched the company’s performance during 2018. In the same period, revenues from EMEA (which account for 25% of Unisys’ total) were down 6% year on year to c.$732m, driven by declining revenues from the company’s unprofitable cheque-processing operations. Meanwhile, LATAM revenues were down 17% to c.$264m and APAC down 12% to c.$350m. Unisys’ soon to be sold, US Federal business, grew by 27% in 2019 to c.$732m, whilst the company’s largest commercial vertical (Financial Services) was flat at c.$644m. Public was up 7% to c.$674m whilst Commercial was down 3% to c.$880m.

Unisys recently delighted the markets by announcing its intention to sell its US government business to SAIC for $1.2bn (see: Unisys to sell US Federal Business…). Shares in the company rose sharply following news of the disposal, with CEO Peter Altabef declaring “The shackles have come off”. The sale, which represents about 25% of the company’s total revenue, will allow Unisys to significantly reduce its debt, tackle its $1.7bn pension deficit and invest in its private sector operations.

Unisys has been struggling under the weight of its indebtedness and has been excluded from bidding for certain major contracts due to its parlous balance sheet. Prospects for the slimmed down company look more favourable and Altabef has described 2020 as a year of transition. The company will take heart from another year of solid growth, following a similar performance in 2018 (see: Another solid period for Unisys) but will need to continue investing in the modernisation of its offerings and capabilities.

Posted by: Jon C Davies

Tags: results  

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Wednesday 26 February 2020

Backers feed HungryPanda more than bamboo shoots for growth

logoIf you want to order a takeway Chinese, then of course you can use all the usual ‘on demand’ food delivery suspects. Or you could try HungryPanda, which specialises in Chinese cuisine and groceries, but you’ll need to switch the English language version of the website if you are not fluent in Mandarin.

Founded in Nottingham (!) in 2017, and now operating in 31 cities across the UK, North America, ANZ and Europe, HungryPanda recently raised $20m in what appears to be its first external funding. The round was led by 83North and Felix Capital.

HungryPanda runs its own fleet of delivery drivers, yet according to an interview in UKTN with founder and CEO, Eric Liu, HungryPanda “is operating profitably in the UK and New York”. That, as they say in the classics, is a good trick if you can do it.

Nonetheless, HungryPanda has a clear USP and a well-defined target audience. That’s a couple of important ticks in the business model box.

Posted by: Anthony Miller

Tags: funding   startup  

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Wednesday 26 February 2020

Serco back in growth mode

SercoFull-year results from Serco outline in “black and white” another year of progress, as it sees Group revenue growth for the first time since 2013 and a second successive year of profit growth. It’s taken time, but CEO Rupert Soames and his management team have done a great job rescuing Serco from where it was just a few year ago and returning it to growth mode. 

Headlines include revenue of £3.2bn, an increase of by 14.5%, comprising 8.2% organic growth, 4.8% from acquisitions and a 1.5% currency benefit. Serco took the decision a while back to focus efforts away from the UK and this has paid dividends with the Americas growing by 35% (of which 19% was organic) and Asia Pacific up 16% also performing strongly. Conditions in Serco’s domestic market remain tough, but credit where its due as UK and Europe grew revenues (up 5%) for the first time since 2013. Meanwhile, underlying trading profit for the Group saw 29% growth to £120m.

Serco has expanded its order book by £2.1bn to £14.1bn (up 40% on 2017) off the back of a  string of big contract wins during 2019, among them UK asylum accommodation and support services (worth £1.9bn); defence healthcare provision in Australia (worth £0.6bn); and in H2 the Prisoner Escort and Custody Services (PECS) contract covering London and the whole of the southern region (£0.8bn); and the extension of the Australian immigration services contract (£0.4bn). 

The “big ticket” pipeline is also looking healthy, closing 2019 at £4.9bn. It was £5.3bn at the start of the year but reduced to £3.2bn at the half-year stage, reflecting strong sales activity. BD activity has clearly delivered in the second half of the year to replenish the pipeline.

Management is setting revenue guidance for 2020 at between £3.4-3.5bn, representing growth of 6-8% with underlying trading profit expected to grow by about 20% to around £145m. Investors will also be pleased as the board recommends restarting dividends, last paid to shareholders in 2014. 

Posted by: Marc Hardwick

Tags: results   bps   Serco  

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Wednesday 26 February 2020

Salesforce chalks up another record year

LogoA stronger than antcipated final quarter helped Salesforce.com deliver another high growth year. Constant currency revenue in Q420 (the three months to 31st January) increased by 34% yoy to $4.85bn. This beat the top end of the prior quarter’s issued guidance - albeit it was considered a little light (see here) - by c.$100m.  As a result, FY20 turnover ended up 29% yoy to $17.1bn.

Losses more than doubled sequentially in Q4 to $248m constraining full year net income to just $126m (FY19: $1.1bn). The bottom line drop was driven primarily by acquisition activity over the last twelve months. This included the $15.7bn investment last August in Tableau, which contributed $652m of revenue in FY20.

In terms of the company’s service offerings, Salesforce Platform was the star of the show last year. This delivered top line growth of 57% yoy (assisted by the impact of the aforementioned Tableau acquisition) and now accounts for c.28% of all subscription and support revenues. From a regional perspective Europe, which represents around one fifth of Salesforce’s global activities, was the strongest performer. This geography saw its turnover increase by 34% over FY19.

The publication of the its results was accompanied by the announcement that the company has entered into an agreement to acquire Vlocity, Inc. for approximately $1.33bn. San Francisco-HQ’d Vlocity is a  provider of industry-specific cloud and mobile software, built natively on the Salesforce platform,  for communications, media and entertainment, energy, utilities, insurance, health and government organisations. The acquisition is expected to close during Q22.

Looking forward, the company has raised full year fiscal 2021 revenue guidance to between $21.0bn and $21.1bn. If achieved, this will both deliver yoy growth of c. 23% and keep Salesforce on track to reach its a stated long-term goal of $34bn-$35bn in FY24.

Posted by: Duncan Aitchison

Tags: results   saas   cloud   crm  

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Wednesday 26 February 2020

Smile – you’re on camera at Brazil’s Carnival!

picWhile the debate about the use of facial recognition technology rages on here in the UK, I bring you news (courtesy of my good friend Angelica Mari at Brazil Tech) that the technology was in use at Brazil’s annual Carnival, which officially ends today.

Cognoscenti will know that the Carnival is not just one event in Rio. There’s a similarly impressive parade in Sao Paulo’s Sambadrome (purpose-built stadium), as well as street parades in cities and suburbs throughout Brazil. Indeed the country shuts down for the best part of a week.

According to Mari, there were “dozens of cameras” in use at the Sao Paulo Carnival, sending facial images (yeah, I know …) to the police database, which before the Carnival already had information related to over 32m citizens. It’s estimated that there would be over 15m people on the streets during the celebrations in the city of Sao Paulo. Mari had previously reported on a formal protest by Brazil’s consumer rights body, Idec, over plans to use biometric technology, including facial recognition, for the country’s social security system.

Posted by: Anthony Miller

Tags: brazil   facialrecognition  

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Wednesday 26 February 2020

Laundrapp gets “new lease of life” with digital agency aggregator. Go figure!

logoJust after I posted my comment on the collapse of London-based ‘on demand’ laundry service, Laundrapp, last week (see Collapse of Laundrapp cleans out backers), they tweeted me to say they were still in business.

It seems Laundrapp was acquired that day by Manchester-based digital agency aggregator, Inc & Co. Terms were not disclosed but I assume the consideration was three-fourths of nuppence.

This saga gets ever more bizarre. Inc & Co, which was founded in June last year, acquires digital agencies “to give them a whole new lease of life” – which I think boils down to a shared back office. As far as I can tell, Laundrapp is inc & Co’s first acquisition of a consumer services business.

There’s nothing about this that makes any business sense whatsoever. Laundrapp had a fundamentally flawed business model. It had exhausted its funds and couldn’t raise any more dosh. I can’t see how sharing a back office run by an eight-month old buy-and-build startup is going to fix its problems.

Posted by: Anthony Miller

Tags: acquisition   startup  

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Wednesday 26 February 2020

*New Research* Insurtech Innovation: "New Kids on the Block"

Insurtech Innovation: "New Kids on the Block" details a "Hot 10" of innovative, tech-driven, UK insurance startups.

In the context of TechMarketView's 2020 research theme of "Digital Chaos" it is the disruptive potential of these newcomers that is increasingly driving change within the insurance industry.

InsurTech

Just as technology and innovative business models brought major change to the UK insurance insurance industry in the 1990's, so a new breed of tech-enabled propositions is now having an increasingly significant impact.

Subscribers to TechMarketView's FinancialServicesViews research stream can download Insurtech Innovation: "New Kids on the Block"  now.

If you do not currently have access to this research, please contact Deb Seth for further information about TechMarketView’s subscription services.

Posted by: Jon C Davies

Tags: insurance   insurTech  

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Tuesday 25 February 2020

*UKHotViewsExtra* Intuit set to benefit from Credit Karma

logoIntuit is making the largest acquisition in its history, investing $7.1bn to take on fintech Credit Karma. The teenage company (founded in 2007), is a substantial business with annual revenue estimated at $1bn, based on 100m registered users of which 37m are said to be active monthly. 

Credit Karma started out offering credit score checking but expanded and now offers a range of software and services for personal financial management. They include financial planning and tax filing, which position it as a competitor to Intuit, but other aspects of Credit Karma indicate this is more than a move to take out a disruptive competitor. Intuit stands to benefit from much of what Credit Karma has. More...

Posted by: Angela Eager

Tags: results   acquisition   software   FinTech  

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Tuesday 25 February 2020

Three pillars provide solid platform for dotdigital

DotdigitalInterim results from marketing automation SaaS provider dotdigital confirms continued progress in its three pillar strategy of geographic expansion, partnering and R&D. This saw revenue from continuing operations in H1 grow 15% to £23.1m (H119 £20.1m) and adjusted EBITDA expand 39% to £9.3m (H119 £6.7m).

Geography wise the company is diversifying away from the UK making progress in both EMEA and in particular the US. Organic international revenue was up 33% to £7.9m (H119 £6m), with international sales now accounting for 34% of all sales (H119 30%). North America is particularly important with revenue growing organically here 18% to $5.1m (H119: $4.3m). Dotdigital now has a dedicated US GM in place and is sensibly pursuing a niche approach, ‘piggy backing’ off its relationship with ecommerce platform provider and partner Magento. Magento (part of Adobe) connector revenues across all geographies grew 16% in the period.

Indeed, partnering remains key for dotdigital with SIs and the 'refresh' of client CRM and ecommerce platforms a major gateway to new clients. Sales through connectors into strategic partners increased 4% to £10.7m (H1 2019: £10.3m), impacted by ramp up times of new staff. 

Dotdigital spent $2.9m on product R&D during the period (H119 £2.6m), focusing efforts on both improving its omni-channel offer and increasing investment in AI and Machine Learning for product recommendation. Its differentiator here is that it uses client specific data to tailor algorithms specific to that customer rather than using a generic approach.

Things continue to look up for dotdigital, with a solid 15% organic growth in a competitive market. Marketing Automation continues to be a fast-growing market and with organisations still overly dependent on email the potential of true omni-channel remains very strong. 

Posted by: Marc Hardwick

Tags: results   marketing   automation  

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Tuesday 25 February 2020

JPMC to join the chase for UK digital banking custom

ChaseAccording to reports, JPMorgan Chase (JPMC), is poised to follow in the path of its rival Goldman Sachs, by establishing a new retail “challenger” bank in the UK. The US financial services giant is understood to be actively planning its new digital banking venture under the Chase brand, also used for its US retail branch network.

Goldman Sachs successfully launched its own online only savings bank here UK in 2018, under the Marcus brand. The new digital Chase brand is expected to be a fully-fledged retail bank, supporting current accounts and associated transactions, rather than just savings. Rumours of JPMC’s intentions have been circulating for some time and in June 2019, the company was close to taking a stake 10x Future Technologies, the cloud-native core banking specialist run by former Barclays CEO, Antony Jenkins (see: JPMC mulls 10x equity stake).

JPMC had a previously short-lived foray into the neo-banking world via its ill-fated US venture Finn. The mobile only bank closed down in June 2019, barely 12 months after its launch due to poor customer adoption. The UK is however, likely to provide a far more fertile environment for JPMC, as evidenced by the success of other new challenger bank startups such as Starling and Monzo (see: Starling flies the nest…).

Posted by: Jon C Davies

Tags: challengerbank  

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Tuesday 25 February 2020

McAfee acquires Light Point Security for web isolation

McAfee acquires Light Point Security for web isolationMcAfee’s proposed acquisition of browser isolation specialist Light Point Security enhances the supplier’s ability to protect inbound and outbound web and cloud data traffic for public and private sector organisations.

Founded in 2012 by two former National Security Agency (NSA) employees, Baltimore-headquartered Light Point’s flagship platform moves all web content to a remote isolated virtual environment and sends only a safe visual stream to the end user’s client device, preventing the chances of malware ever reaching let alone penetrating the corporate network.

The company claims several suppliers of IT solutions and systems integrators to US public sector organisations as customers, including Discovery Benefits, ELEVI Associates, OPSWAT, Raven Data Technologies and NetAbstraction.

Light Point’s technology will now be integrated into the Secure Web Gateway, Data Loss Protection (DLP) and Cloud Access Security Broker (CASB- see Cloud Access Security Brokers: Benefits and Opportunities) components delivered as part of McAfee’s MVISION Unified Cloud Edge (UCE) security suite, giving customers the option of applying enhanced threat protection across their networks and SaaS applications such as Microsoft Office365.

Terms of the acquisition were not disclosed, but we think the deal sits well with McAfee’s strategy of delivering end to end device to cloud security solutions for organisations of different sizes – from SMB and SME right through to corporates and large public sector organisations (read our Cyber Security Supplier Ranking 2019 report here) – through its large portfolio of global channel partners.

Posted by: Martin Courtney

Tags: acquisition   CASB   DLP   cybersecurity  

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Tuesday 25 February 2020

Youtility looks to ride the open banking wave

YoutilityLondon-based startup, Youtility, has secured an investment of £4.5m as it looks to capitalise on the opportunities around open banking in the UK. The funding has been provided by Michael Spencer (the founder of ICAP) and was supported by NEX and Fair By Design Fund (a collaboration between Barclays and Acension Ventures).

Fledgling personal finance platform, Youtility, was launched by co-founders, Will Kostoris and Charlie Quigley, in November 2018. The company provides a tailored comparison and switching service that uses machine learning and behavioural analytics. The Youtility app allows users to view all of their outgoings in one place and keeps them up to date with the competitive pricing of their utility providers in order to facilitate informed switching at any time. 

The fintech has joined the growing band of similar offerings that are enabling banks to connect their customers with third-party service providers, facilitated by data flows across open-APIs (see: Open banking momentum starts to build).The early-stage venture intends to use its first major funding to develop its product lines and increase hiring as it looks to further enhance its proposition.

The successful funding of Youtility and the emergence of another customer focused fintech, demonstrates the prevailing opportunities created by open banking in the UK. The company is typical of the new wave of fintechs, with a smart concept that has obvious end-user appeal. Meanwhile, the established banks are seeking to enhance customer engagement via new service offerings, as the startup community continues to create opportunities for tech-driven differentiation.

Posted by: Jon C Davies

Tags: funding   OpenBanking  

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Tuesday 25 February 2020

Chattermill chats up backers for further funding

logoThe internet has opened up a slew of channels by which customers can provide feedback on their experiences with businesses. There’s also a slew of startups whose mission is to try to make sense of all this feedback.

These startups have nuanced approaches to analysing customer experience. For example, Lancaster-based Relative Insight analyses language data from unstructured and undefined data sets such as customer feedback, social media, online product ratings and reviews, web page copy and market research surveys, with the aim to understand and compare linguistic and attitudinal differences (see Attitude and linguistics secures $5m for Relative Insight).

There’s also London/Santa Monica-based EnjoyHQ extracts unstructured customer feedback from multiple channels and parses it into themes and graphics for user experience (UX) product developers (see Backers see joy in EnjoyHQ’s UX feedback platform).

Also in the throng is London-based Chattermill, which seems to do similar stuff. Founded in 2015, Chattermill has raised $8m in a Series A round led by DN Capital and supported by Ventech and btov Partners with participation from Silicon Valley Bank, various angels and prior investors. Chattermill had previously raised £600k seed money back in December 2017 (see Deep chat analysis helps Chattermill secure funds).

Differentiation is not Chattermill’s only challenge. Successful implementation appears to rely on Chattermill building a bespoke analysis model for each customer. I would imagine this model would need constant refinement as the customer’s business (and feedback channels) shift with the market. This is reflected in Chattermill’s pricing policy, which is also bespoke. This calls into question Chattermill’s scalability.

I think Chattermill will need to develop an implementation partner channel if they really want to scale up so they can concentrate their efforts – and funds – on improving the ‘smarts’.

Posted by: Anthony Miller

Tags: funding   startup   customerexperience  

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Tuesday 25 February 2020

*NEW RESEARCH* Application Services Supplier Prospects 2020 and Beyond

2020 would seem set to be a good year for the Application Services (AS) market. The uncertainties surrounding the big Brexit question that dogged investment decisions during the last third of 2019 have been removed and customerCover spend on the “new” continues to expand quickly. Demand in the applications-centric Digital Solutions arena, for example, is set to increase by over 30% during this year. At an overall AS market level, however, growth remains muted. For the forecast period to 2022, we expect AS CAGR to reach just 2.7% on par with the overall SITS market. So why the disconnect?

We believe that the answers lie in this year’s 3 C’s; Chaos, Confidence and Cost. As enterprises race to digitally transform, anarchy has often been encouraged, resulting in unruly digital development far and wide across organisations. The impacts of investments have been dissipated. The practicalities and expense of both restoring order and driving successfully fundamental digital-enabled business change - including deep transformation of business processes, the elimination of organisational silos and cross-boundary data sharing – are becoming more fully appreciated.

This is the market context for Application Services Supplier Prospects 2020 and Beyond report which is now available to download (click here). Subscribers to TechMarketView's Tech Insights can read the full analysis of the challenges facing the players in the AS arena over the coming year, what they need to do to be successful and the ways to win in the longer term. The document also includes profiles of the top 10 Application Services Suppliers to the UK market

If you are not yet a Tech Insights subscriber, please contact Deb Seth to find out how you can access this research. 

Posted by: Duncan Aitchison

Tags: systemsintegration   applications   suppliers   digitalchaos  

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Monday 24 February 2020

Coronavirus spooks markets

As readers will know, I have been getting more and more concerned about the affects of Coronavirus on the global economy.  Markets just seemed to be ignoring the threat ad powering ahead regardless.

SharesLast week we took our ‘Little Ones’ to the carnival in Venice. Loads of masks on the streets- but all of the carnival variety. We returned on Thursday. Yesterday the Venice Carnival ended early and much of that region of Italy went into lockdown. So now we don’t just worry about trade with China (and much of that region too like South Korea) but the very real prospect that it will close borders in Europe too.

Today, stock markets round the world have opened sharply lower. Seoul’s Kospi Index was down c4%. The FTSE100 is down a massive 3.2% (at 9.25am). I fully expect pretty massive downturns in the US - in particularly in the buoyant tech sector - when their markets open later in the day.

This was pretty much anticipated. What is more unsure is how long will it last. If coronavirus is contained quickly, expect the markets to bounce back quickly. If not, I really do see a bit of a bloodbath.

Of course, this ignores the human cost of those affected - even those in enforced quarantine. As our trip to Venice illustrated, ‘There but for the grace of God go I...’

Posted by: Richard Holway

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Monday 24 February 2020

Revenue up, EBITDA down for LoopUp in FY19

Revenue up, EBITDA down for LoopUp in FY19Macro first half headwinds and an unusually high rate of customer churn following intermittent service availability issues in November and December last year had a mixed impact on LoopUp Group’s full FY19 performance, which saw revenue rise 24% year on year to £42m while EBITDA shrank 17% to £6.4m.

A trading update reveals that while the UK and Germany rebounded in the second half, the web conferencing specialist experienced a similar slowdown in the US as befell its core European markets in H1 (see LoopUp sees momentum checked) as active minutes per user dipped 8% yoy.

Profitability should improve in FY20 after the company trimmed 24 people from its commercial team in a bid to improve its sales efficiency and consolidate some of the assets from its £61m acquisition of MeetingZone Group in 2018 (which we estimated added about £2.5m of revenue to the FY19 total).

Plans to increase LoopUp’s capitalised product development spend from £5m to £6m could adversely impact the bottom line if innovation does not immediately lead to increased orders however.

Much may also depend on the company being able to minimise any lingering fallout of those service issues as the company fights competitive pressure from free or bundled conferencing alternatives such as Microsoft’s Skype or Teams.

Posted by: Martin Courtney

Tags: FY19   tradingupdate   conferencing  

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Monday 24 February 2020

More dosh for ‘findanexpert’ startup techspert.io

logoWhen Graham Mills and David Holden-White founded their startup in Cambridge back in 2016, they may have been tempted to call it ‘findanexpert.com’, which rather does what it says on the tin. But that name had already been taken, so they chose techspert.io (originally ‘biotechspert’, as its roots are in healthcare and life sciences). The concept is nice and simple: you have a complex academic question; techspert.io uses its ‘AI-driven’ platform (and manual intervention) to find you an expert to answer it.

Techspert.io has just announced that it has raised £3.76m in a Series A round led by Nauta Capital. Besides boosting R&D, the funds will be used to open a new office in New York.

When I wrote about techpert.io’s previous funding round at the end of 2018 (see 'Dial-an-expert' startup techspert dials up £1m funding), I mentioned that there was scant information on the business model. That’s still the case today, but it looks like techspert.io takes a slice of the ‘honorarium’ that the expert charges to answer the question.

As I said at the time, it’s really tough to make money from a transactional online marketplace (which is what techspert.io is, in effect) even when no physical goods change hands (or perhaps, more so). The idea is neat, and they have good backers. But I struggle to see how it will make real money.

Posted by: Anthony Miller

Tags: funding   startup  

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Monday 24 February 2020

Data is delivering for Ascential

logoManagement at UK media and information services company Ascential, who has been committedly reshaping its business to adapt to the digital economy, described FY19 as a year of “consolidation and progress”, moves that were evident in its full year results.

For the year to 31 December 2019 revenue rose 19.4% (6.4% organically) to £416.2m, while Adjusted EBITDA rose 18.5% (6.2% organically) to £128.5m. Operating profit broadly halved to £19.9m but that was because the “exceptional performance” of acquired Flywheel Digital triggered a £36.9m deferred consideration. That was just one of the areas firing within Ascential, who achieved organic growth across all its divisions.

A lot of work has gone into reshaping the business, including numerous acquisitions over the past couple of years and remodeling the operating model to bring its multi-branded business together while enabling it to cater for specialisms within the segments its serves (the details are available here). In a move that talks to the digital economy, it had also sold off its Exhibitions business. A less welcome sign of the trip hazards of digital economy was the return of its investment in Jumpshot in January 2020, following criticism of Jumpshot’s parent, cyber security specialist Avast,for selling the detailed browsing data of its antivirus' users via Jumpshot.

With its combination of data and insights to help organisations design products, marketing enablement, and ecommerce-driven sales segments, Ascential is a data-driven company feeding the data needs of its customers. Its financial results are evidence that it is in a good place although it is still fairly early days under the new model. The business operates from a manageable three segments but following a series of acquisitions, there are multiple brands to manage within the segments.

Posted by: Angela Eager

Tags: results   software   data  

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Monday 24 February 2020

Softbank scrutinises $100m Behavox investment

BehavoxAccording to reports, UK-based, Behavox, is on the brink of securing a $100m investment from Japanese technology giant, Softbank. Although the funding has not been confirmed as yet, media reports indicate that the transaction is expected to be finalised this week. The deal would mark the 5th UK investment by Softbank’s Vision Fund and see the Japanese backer join Hoxton Ventures, Citi and Index Ventures as stakeholders in Behavox (see: Citi backs Behavox to listen for non-compliance).

Behavox was founded in 2014 by Erkin Adylov, as a specialist provider of regulatory and threat intelligence tools to support compliance teams. The startup provides an end to end data operating platform, that utilises AI to help employers monitor the activities of staff and protect against illegal and potentially damaging behaviour. The company’s offerings have particular appeal in regulated industries such as financial services and the company already boasts a number of well-known global companies.

Whilst cyber security, AML and fraud prevention have been mainstream technologies for some time, providers such as Behavox are becoming increasing popular due to the challenges of controlling risks emanating from inside an organisation. Whilst there are sensitivities and legal boundaries relating to the monitoring of employees, 25 years on from Nick Leeson, these tools are vital within financial services, in light of the potential damage that can be caused by the actions of a single individual.

Posted by: Jon C Davies

Tags: funding  

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Monday 24 February 2020

Why online grocery shopping never quite lived up to expectations

GroceryIf you have read my 2020 Vision - Forecasting the Future paper, you will appreciate the issues involved in looking 10-20 years ahead. I was reminded of this whilst reading an article in The Times today by Graham Ruddick who quoted this from Ocado’s 2010 annual report ‘Less than 3% of total grocery market has moved online, forecasters predict up to 40% to move online by 2025’. The actuality is a fraction of that - maybe just 6-7%.

The Holway family were very early adopters of online grocery shopping in 1999 using Tesco.com. Some current TMV employees might remember us ordering 6kg of tomatoes rather than just SIX tomatoes and having to give them away to everyone in the office that day! We also had continual bad experiences with poor quality fresh food, unacceptable substitutes and errors. If just one essential item is missing, you still have to visit a physical store.

Anyway, I would much prefer to buy fresh vegetables, meat and fish in a physical store where I can change my mind if I don’t like the look of what is on offer. If I am going to a grocery store anyway, I might just as well pick up all the other stuff I need at the same time.

In the last ten years, grocery chains have moved to convenience stores and outlets in railway stations and the like. They recognise that consumers have moved away from the once a week big shop to a more ‘top up on demand model’. As far as I can determine, all the big grocery chains lose money on their online delivery operations. Shop instore and the customer selects, bags, and delivers the items themselves/at their cost. Doing it online shifts all those labour intensive costs to the supermarket. No wonder nobody makes money and only do it because they are scared of losing market share to others.

To be honest - and hopefully not TOO big-headedly - this trend was pretty obvious when I was writing my three 2020 Vision missives in 2003, 2007 and 2010 - which is why I avoided the kind of prediction Ocado made.

Posted by: Richard Holway

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Friday 21 February 2020

Halicin antibiotic discovery showcases value of AI/ML

Tlogohe buzz over MIT using a deep learning algorithm to identify a powerful new antibiotic compound - halicin - that has killed off bacteria strains resistant to known antibiotics during lab tests, is a major breakthrough (see here). It is a first in terms of antibiotic discovery and all the more important given the growing crisis of bacteria mutating and becoming resistant to antimicrobial drugs. 

One of the many interesting aspects of the discovery process was that having learned the molecular features of a good antibiotic, the focus of the model was to seek out the compounds that were likely to be effective rather than finding antimicrobial lookalikes. This approach, which is very different to existing algorithm-enabled drug discovery, increased the chances of discovering drugs that would work in different ways, that bacteria had not developed resistance to. 

The is another example of AI/ML proving its value within drug discovery. There are many examples including BenevolentAIHealx and GTN Ltd (Generative Tensorial Networks) who are all innovative UK startups active in the area. GTN’s combining of quantum physics techniques and machine learning to speed up the creation of new drugs is a point of differentiation. Exscientia is another UK AI/ML-based drug discovery company and it has teamed up with Bayer to identify and optimise drug candidates to treat cardiovascular and oncological diseases.

Delivering results using AI/ML within the pharma sector is obviously immensely valuable but organisations in other sectors can also learn from its success and start to gain confidence from successful outputs. The approach used for the halicin discovery  - looking for drugs that would work in radically different ways to existing antimicrobials - and is a great illustration of how AI/ML can be used to discover the unknowns. 

Posted by: Angela Eager

Tags: software   pharma   AI   machinelearning   healthcare  

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Friday 21 February 2020

Navigate Digital Chaos with TechMarketView

TechMarketView’s research theme for 2020 is all about taming Digital Chaos. You can learn more about what this means for both buyers and suppliers in our brand new brochure, where you will also get insights from each of our Research Directors on our exciting research agenda for the year ahead.cover

TechMarketView is also very excited to announce a new research approach, called Tech Insights, designed to help our clients succeed in the digital age. 

We have broken down the silos between our historic ‘horizontal’ research streams in Cloud & Infrastructure, Apps, Software/Emerging Tech, Business Processes, Cyber and Connectivity to create Tech Insights. This stream of research is now available in addition to our core Foundation Service and alongside our in-depth coverage of key vertical markets in the PublicSectorViews and FinancialServicesViews streams. 

With Tech Insights, we’re turning things on their head and from 2020 our exciting research agenda will be focused on the key themes (see here) we see driving market activity. Our expert team of Research Directors will be given the freedom to create ground-breaking research in key areas, enabling our corporate clients to understand, and plan for, success in the digital age. Expect to see even more collaboration between our analysts and a ‘joining of the dots’ across key market areas - such as platforms and customer experience. 

TechMarketView can help you to navigate change and spot opportunities across a broad spectrum of markets from cyber security to cloud transformation; and from the payments market to the police market.

For more information on the research agenda or any of our services, including our new 2020 subscription packages, drop us an email to info@techmarketview.com.

Posted by: HotViews Editor

Tags: cloud   research   cyber   AI   machinelearning   data  

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Friday 21 February 2020

AdEPT launches £4m funding as it mulls further acquisitions

AdEPTUnified communications specialist, AdEPT Technology plc, has launched another fundraising push as it plots further acquisitions. The Tunbridge Wells based firm has revealed plans to raise £4m to help support its growth and expand its capabilities, following a number of recent acquisitions.

In April 2019, AdEPT paid £5.2m for Doncaster-based Advanced Computer Systems (ACS), in a move that added to the company’s growing presence in the education and healthcare segment (see: AdEPT furthers education expertise with ACS buy). The ACS deal followed AdEPT’s takeover of ETS in 2018 and Atomwide in 2017.

AdEPT is looking to place approximately 1.24m additional shares with both existing shareholders and new investors. The offer is priced at 320p per share, which represents an 11% discount Thursday's closing price. The placing will run simultaneously with a subscription of 7,813 new shares by AdEPT directors at the same price.

In November, AdEPT revealed interim results showing a 26% increase in revenue to £30.8m fuelled by the ACS takeover. EBITDA was up 18% to £6.1m and adjusted profit after tax up 4% to £3.9m. The company reported senior net debt of £31.5m as at 30 September 2019.

AdEPT specialises in the provision of integrated IT, communications and connectivity and inorganic growth is a key component of the company’s strategy. AdEPT’s recent M&A activity has increased its scale to over 300 employees and expanded its reach within the UK. Coupled with cloud adoption and virtualisation, going forward, the advent of SD-WAN and 5G should help to provide fruitful opportunities for the expanded group.

Posted by: Jon C Davies

Tags: funding  

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Friday 21 February 2020

UiPath back on track?

UiPathIn May of last year robotic process automation (RPA) major UiPath announced a $568m series D funding round valuing the business at a whopping $7bn. Yet just a few months later the company confirmed it has laid off around 11% of its entire workforce. Had UiPath overshot it’s the true market potential and was this a warning sign for the entire RPA market?

Well if results out yesterday from UiPath are anything to go by it looks to be firmly back on track, announcing that it closed December 2019 with $360m in Annual Recurring Revenue (ARR), with net new ARR in the fourth quarter exceeding $60m. By way of context it crossed the $100m ARR rate back in Mid 2018. The company claims more than 6,000 clients and a community of some 750,000 RPA developers.

RPA is certainly going through some bumps in the road on its path to maturity and with so much hype around its not surprising that expectations continue to run well ahead of reality. 2020 has to be the year where RPA gets ‘back to basics’, scaling what is working and delivering client value and industrialising those areas that are delivering genuine business outcomes for clients.

Posted by: Marc Hardwick

Tags: results   RPA  

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Friday 21 February 2020

Sopra Steria continues to improve

LogoParis-headquartered software and services firm Sopra Steria delivered a strong performance in FY19. Constant currency revenue for the twelve months to 31st December increased by a healthy 8.2% yoy to €4.43b. Operating profit rose by over 15% yoy to €354m to generate an operating margin of 8%, an improvement of 50bps over 2019.

The company did, however, lose some momentum during the final quarter of last year. A slowing of top line growth to 2.7% yoy in France, Sopra Steria’s largest region, and a 1.4% yoy sales decline in the UK combined to limit the company-wide Q419 revenue increase to 3.3%.

Sopra Steria is by no means the only SI to have found the going tougher during the latter part of last year in this country. Capgemini reported a 3.1% yoy UK revenue decline during Q419 (see here) while Cognizant saw its top line growth rate drop from nearly 11% in H119 to just 3.6% in the second half.

There were, however, clear signs of progress by Sopra Steria in the UK market. Excluding the impact of the sale of its UK recruitment business (see here), turnover in this country was up 7.3% yoy to €771.5m. Operating profit for the region increased significantly up from 5.7% in FY18 to 7.3% last year. This was largely driven by the improved performances of Sopra Steria’s two joint ventures in the public sector - NHS Shared Business Services with the Department for Health & Social Care and Shared Services Connected Limited (SSCL) with the Cabinet Office - which together account for over 40% of revenues in this geography.

There was more good news from SSCL at the back end of the year with the award to it by the UK Ministry of Defence of a seven-year, £300 million contract to provide improved administrative, payroll, pension and human resources services for military personnel (see here). The company recognises, however, that there is still much more to be done, particularly in the private sector, if it is to continue to adjust successfully to competing in a digitally-driven market.

Posted by: Duncan Aitchison

Tags: results   systemsintegration  

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Friday 21 February 2020

Teleperformance sees record growth

TeleperformanceThe contact centre market has become a tough place to operate as traditional voice-based services become a commodity. Operators have the challenge of shifting clients to value added services that risk cannibalising core revenue streams. Vendors must transform themselves before they can credibly offer their clients genuine digital services. Teleperformance has the added challenge of being one the biggest players – a true ‘juggernaut’ of contact centre operators. 

That all said – the numbers don’t lie and Teleperformance is clearly getting a lot of things right at the moment. Not only is the business growing double-digit with revenue up 20.6% as reported and 10.6% like-for-like to €5,355m, but it’s getting significantly more profitable with EBITA (before non-recurring items) of €764m, up 26.7% vs. 2018 with a margin of 14.3% (+70 bps). Given the state the market this is impressive stuff from the French giant. So, what’s the secret? 

Teleperformance is unusual in the BPS space – it plans for multiple years ahead when most competitors focus no more than 12 months out. This allows it to make longer term investment decisions that has seen significant progress in its digital offer. This it hopes will allow it to become a €7bn business by 2022, including targeting acquisitions in high-value services with average like-for-like growth of at least +7% per year over the 2020-2022 period and an average annual increase in EBITA margin of at least +10 basis points over the same period. Given the state of the market and the scale of the operation, this will be impressive stuff and explains why the share price has gone from c.€60 to c.€250 over the last five years.

Posted by: Marc Hardwick

Tags: results   bps   contactcentre  

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Friday 21 February 2020

Backers hop into Hopin to create more virtual events

logoIf you combine a mega-scale webinar with chatrooms, what do you get? You get Hopin, which claims to be the first all-in-one live online events platform.

Hopin runs online events that can cater for up to 100,000 attendees. Event organisers can do pretty much everything they would do for a physical event, including broadcasting the main event(s), hold breakout sessions and private meetings, set up vendor booths, and have one-to-one chats with fellow attendees, all remotely. Launched in June 2019, Hopin claims to have already run over 1,000 events and has a 10,000-strong “wait list” (I think they mean suspect list!).

Based in London, Hopin has raised £5m in a seed funding round led by Accel, with participation from Northzone, Seedcamp, Web Summit’s Amaranthine Fund and Slack Fund along with various angels.

Hopin is far from alone in the event management market. There are dozens of platforms for managing large-scale events, some of which also include live streaming and recording. But Hopin’s USP is that the event can be totally virtual, although Founder and CEO Johnny Boufarhat makes the point that Hopin can be ‘overlaid’ on a live event too.

That way I see it, Hopin approaches events from the point of view of content delivery, attendee interaction and networking, which I think is spot on. I suspect the event administration side of things is not as well developed as more traditional event management platforms, but I am sure that will come as the platform matures.

I think Hopin has the opportunity to vastly develop its ‘event virtualisation’ concept using VR/AR technologies to create a far more ‘immersive’ event than might be achieved in the physical world. I really hope it does!

Posted by: Anthony Miller

Tags: funding   startup  

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Friday 21 February 2020

Virgin Galactic shares rocket

VirginWhenever I write about Elon Musk’s companies - be it Tesla, SpaceX, Boring Company etc - I always get a big ‘email-bag’. A year back I reported on the launch of SpaceX’s Crew Dragon many times culminating in Mission Accomplished  This paves the way not only for Crew Dragon to take humans to the ISS but for commercial space flights.

SpaceX isn’t the only contender in the commercial space travel market. Boeing is there too - but they have other more pressing problems with the Max - and Amazon’s Jeff Bezos Blue Origin. Another is Virgin Galactic

Richard Branson’s Virgin Galactic is, however, the only pureplay space travel venture where you can buy shares on the public market. Virgin Galactic reversed onto the market in Oct 19 at under $10. Since then their shares have behaved much like their rockets! Yesterday the stock surged past $40. That puts a valuation of nearly $8b for a company currently with no real revenue. But, I guess, that’s not really what all the fuss is about!

Virgin Galactic is now close to its first commercial flight. Indeed 600+ people have paid deposits to get into low orbit space and experience just a few minutes of weightlessness. The experience will set you back c$250,000.

Virgin Galactic is, I guess, a UK venture. Although based in the US at the moment, there are hopes that it will move to be based in Newquay.

Footnote - When I wrote Virgin Galactic ‘shares have behaved much like their rockets’, I should have added that rockets also have a tendency to crash back down to earth!

Posted by: Richard Holway

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Friday 21 February 2020

Conduent shrinks but increases the focus

ConduentBusiness Process Services specialist Conduent has gone through a lot of changes over the last twelve months. Under new leadership since August, CEO Cliff Skelton has been taking the business through a strategic review on a quest to simplify and focus the business on the areas that will deliver growth and improved profitability.

Full-year results published yesterday highlight the legacy issues, posting revenue for 2019 of $4,467m down 17.2% compared on 2018. When adjusted for divestitures and the like, revenue was $4,431m down 4.5% on the previous year. Adjusted EBITDA for 2019 was $493M down 7.9% on the prior full year.

Despite the decline shares in Conduent are up some 6% overnight on the belief that Skelton is moving the business in the right direction. Ever since the business was spun out of Xerox back in 2017 it has been looking to slim down and focus on its growth areas. 

Skelton has taken the business through a major strategic review lasting the best part of six months to underpin an investment plan to drive growth and improve margins. This will see the business focusing efforts on five main areas – End user experience (which will include contact centre and digital services), HR and learning services (including employee engagement), transaction processing (including finance and accounting, legal and payments), the Transport business and the Public Sector (mainly in the US). 

This is a massive step forward for Conduent, moving away from its old ‘matrix model’ which was confusing both internally and externally. Conduent is expecting to simplify and shrink further in 2020 with guidance of a revenue decline between 6% to 8%. However, it expects to improve profitability with adjusted EBITDA expected to increase between 10.5% - 11.5%. It’s still early days but it looks like Skelton is on the right track to finally get the focus right.

Posted by: Marc Hardwick

Tags: results   bps   conduent  

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Friday 21 February 2020

Larry Tesler - the innovator you've probably never heard of - dies

LisaI’ve told the story of ‘How the Apple Lisa changed my Life’ many times. In 1983, I was the Group Marketing Director at Hoskyns (now Capgemini) where one of my responsibilities was for the Hoskyns Business Centres which I had setup in 1981. We had quickly become one of the biggest suppliers of the PCs (from  IBM, DEC and HP) to the corporate world. Apple really wanted to get a toe hold there too.

So in 1983, Apple UK loaned me a Lisa - one of the first to arrive in the UK. Its mouse/GUI blew me away. But it had so many other novel new features. One was the scroll bar which we now all take for granted. Before you had to scroll using the arrow keys. With the Lisa you positioned your mouse on the bars which ran vertically and horizontally in your document to scroll left/right or up/down.

Another innovation was ‘Cut and Paste’. We do it now countless times - even me writing this article! Or ‘Find and Replace’.

I write this today as the inventor of these functions - Larry Tesler - died on 17th Feb 20 in San Francisco. Tesler had been working at Xerox Park when Steve Jobs made his historic and game-changing visit in 1979. When he saw Tesler’s innovations he shouted ‘This is the greatest thing. This is revolutionary!’ Jobs incorporated many of the features he saw at Xerox Park into the Lisa. Indeed he poached Tesler to work on the Lisa team (Far right in photo).

Lisa was not a success - mainly because it was extortionately expensive. But its innovations were built into the Mac - launched in 1984.

The rest, as they say, is history.

Footnote - Great interview with Tesler from 2005 by Tekla S Perry. Click here.  

Posted by: Richard Holway

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Thursday 20 February 2020

Slow month for UK SITS M&A

chart2020 started off with some positive prospects for the European TMT market, according to latest data from corporate finance firm Regent Assay. The number of transactions went up by 10%, increasing from 299 to 329, while the aggregate deal value gained an extra billion, climbing from $23.4b to reach $24.7b. Poor results came from the median P/EBITDA multiple, which plummeted at a 12-month low of 7.5x. However, sellers will have found some reassurance in a stronger P/Sales ratio of 1.67x, slightly above its 2019 average of 1.6x.

There was little significant M&A activity involving UK software & IT services (SITS) companies last month. The largest deal we saw was the £30m acquisition of London-based IoT software and firmware developer, Purepoint, by Reading-headquartered Ascent Software. As we said at the time, we expect 5G to fuel rising demand for bespoke IoT focussed applications and services in a range of new business cases and usage models, and software development houses like Ascent willing to invest in the skills and flexibility to adapt are likely to enjoy positive returns.

There’s more to see if you search on 'acquisition' in the UKHotViews archive. You can also keep in touch with the broader picture of M&A activity in the UK software & IT services sector in our quarterly report series, IndustryViews Corporate Activity.

Posted by: HotViews Editor

Tags: acquisition  

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Thursday 20 February 2020

BAE Systems highlights continued improvement

BAEDefence, security, and aerospace giant, BAE Systems, has announced preliminary full year results that reflect a good performance overall and a continuing improvement. The company has reported revenues for the 12 months ended 31 December, up 8.8% to £18.3bn, whilst operating profits rose by 17.7% to £1.89bn. The results are a marked improvement on this time last year when the company reported a revenue decline of 1% (see: BAE Systems finds growth elusive). BAE has also issued revised plans to address its enormous pension deficit, that stood at £1.9bn in October 2019.

BAE Systems is not a traditional technology provider with SITS representing less than 10% of the company’s total revenues. The UK generates around 30% of BAE’s SITS revenues with 80% of these coming from the public sector (government and defence) meanwhile commercial revenues are almost exclusively financial services (via AML; cyber security; fraud protection; and regulatory compliance).

Cyber and intelligence revenues grew by 3.2% to £1.73bn in 2019, however operating profit was down by 18% to £91m. BAE’s Applied Intelligence arm enjoyed strong performance within UK Government Services, but decided to exit UK Managed Security Services and is also in the process of disposing of its US SaaS business. BAE re-affirmed its commitment to its cyber security operations, which currently generate a very low margin, but are an increasingly important part of government security in particular.

BAE’s management remains optimistic that that the performance of is financial services business will continue to improve, in light of the ongoing growth in market demand. In December BAE Systems Applied Intelligence successfully extended its relationship with leading property and casualty insurer, RSA (see: BAE Systems protects RSA…).

Overall BAE appears to have turned a corner after a difficult period in recent years. The company has re-focused the SITS elements of its business to better align with the key market opportunities. It is notable also that BAE has recently achieved four AWS designations, highlighting the fact that, even in a highly sensitive marketplace, public cloud has an increasingly important role to play.

Posted by: Jon C Davies

Tags: results  

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Thursday 20 February 2020

Osirium secures NHS win

osOsirium, a provider of cloud-based cybersecurity software, has announced a contract with one of the UK's largest regional NHS Trusts.

The Trust has invested in a 36-month licence covering 500 devices. Osirium will provide Privileged Access Management, Privileged Task Management and Privileged Session Management modules via its PxM Platform. Osirium beat off two other competing bids to win the contract to provide services to minimise the risk of security breaches in what is a mixed Windows and Cisco environment.

In October, AIM-listed Osirium raised £4.8m to strengthen its balance sheet and bolster its marketing and product development headcount. First half operating losses (announced in the September) deepened to £1.71m (from £1.36m in H1 in the previous year) in line with management expectations and following significant investment in R&D and sales & marketing. The revenue line looked good, however, with an 11% increase to £520k.

Last year we named Osirium as “one to watch” in our Hot 10 UK Cyber Security Suppliers research.

Posted by: Kate Hanaghan

Tags: contract   security   cyber  

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Thursday 20 February 2020

Limio low-code subs builder attracts angels

London-based Limio logo(founded in 2017) combines subscription management with a no/low code approach to provide an accessible solution for B2C organisations wanting to take part in the subscription economy. 

Its SaaS platform enables organisations to build customisable subscription commerce platforms using a drag-and-drop approach, but with the option of developer-level API activity as organisational needs become more sophisticated. The concept of pick-and-mix component building is well established (from build-a-website within the IT domain to build-a-bear outside it)so applying it to a specific use case makes a lot sense, especially given the market shift towards subscription models across so many industries. Alongside subscription management there are content management capabilities to help make the subscription experience appealing and support marketing initiatives, and analytics to understand the impact.

The proposition - and the leadership team that includes co-founders Amaury de Closset (formerly of GoCardless) and Daniel Morton (previously of Zuora, Three) who thus have experience in this field - have enabled Limio to secure funding of £325k from angel investors that include Michael Pennington (Gumtree), Matt Clifford (Entrepreneur First), Scott Sage and Krishna Visvanathan (Crane VC). 

Posted by: Angela Eager

Tags: saas   funding   startup   software  

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Thursday 20 February 2020

Version 1 continuing to progress in UK Public Sector

Version 1Acas (The Advisory, Conciliation and Arbitration Service) has awarded Irish IT services provider, Version 1, a two-year contract to support 18 legacy applications recently migrated to Azure.

ACASAcas is a publicly funded independent organisation that aims to promote better employment relations and provides advice to employers and employees on things like employment rights, best practice and how to resolve workplace conflict. 

The contract procured via G-Cloud covers a series of legacy applications that have been recently migrated to the cloud, and largely written in .NET including Acas’s Online Booking System and Events Advisory Recording System.

We have highlighted Version 1 as ‘one to watch’ in the UK market and this represents another good win as the company continues to make progress in UK Public Sector, building on previous success with the likes of the Security Industry Authority (SIA).

Posted by: Marc Hardwick

Tags: publicsector   contract   legacy  

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Thursday 20 February 2020

PA bills half a billion

LogoMid-sized management consultancy PA Consulting continues to grow apace. For the twelve months to 31st December 2019 the firm’s fee income increased by 10% yoy to £500m. This makes it the second successive year if double-digit expansion for PA. It is a performance which is both ahead of market - we estimate the UK SITS consulting sector is currently growing by c. 6% per annum (see here) – and comparable to that of leading Big 4 players Deloitte and PwC.

PA now believes that is set to double the size of the business in the next five years. Sustaining a CAGR of c.15% pa will, however, be a significant challenge for a firm that has not hit this heady level of growth in recent years.

Acquisitions will no doubt continue to play material part in the consultancy’s strategy. PA has bought five companies during that last two years (see here), most recently the Cincinnati-based specialist growth strategy firm 4iNNO.

Behind the scenes, PA’s management will also need to navigate the probable exit of its largest investor The Carlyle Group, a global private equity firm which took a 51% stake in the company in 2015 (see PA Consulting to go under the hammer?). The initial stages of this process are in motion with PA’s preference being to secure a similar PE type structure. There is, however, likely to be significant market interest in a trade sale. The prospect of acquiring a large, international, well-respected consulting brand will be tempting to many in the SI arena.

All in all it promises to be an exciting year for the newly appointed CEO-elect Panos Kakoullis. The 30-year Deloitte veteran will work alongside Alan Middleton, PA’s current CEO, and transition into the leadership role during the course of 2020. After 13 years at the helm, Middleton will move to support the firm in an advisory capacity.

Posted by: Duncan Aitchison

Tags: results   consulting  

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Thursday 20 February 2020

Tech recruitment bright spot for Hays UK

logoAs presaged in its recent trading statement (see Headwinds for Hays), half-time results at UK-headquartered recruitment giant, Hays, have been adversely impacted by “events”, notably general strikes in France, Australian bushfires and the UK Election. Add to that a “sharp slowdown” in Germany, Hays’ largest market, due to “reduced business confidence and increased levels of client cost control”, notably in Hays’ largest clients in the Manufacturing and Automotive sectors.  The outbreak of the Coronavirus is of course particularly affecting business in China.

All of this rendered Hays’ headline net fee income (gross profit) for the 6 months to 31st December 2020 some 3% lower yoy, marking six consecutive quarters of declining growth. Operating profit fell by 18%, including a hit from higher levels of investment in its tech platforms.

Hays’ UK&I business suffered a 4% decline in NFI and a 21% fall in operating profit, mainly due to lower permanent placement activity, notably in the Private Sector. However, IT recruitment grew by 8% and Healthcare by 15%. CEO Alistair Cox expected trading in UK&I to remain “subdued”, with changes to IR35 legislation (see *UKHotViewsExtra* IR35: Should we be worried?) expected to lead to a hiatus in Temp activity in parts of the Private Sector.

IT is Hays’ largest specialism globally, representing 23% of group NFI, enjoying several years of uninterrupted growth. So, while “events” may be disrupting demand other sectors of the recruitment market, it seems that – perhaps as a consequence – the demand for IT skills remains unabated.

Posted by: Anthony Miller

Tags: recruitment  

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Thursday 20 February 2020

Capita lands Norfolk comms extension

CapitaCapita has announced a £7.5m four-year extension to its network and IT services contract with Norfolk County Council. The contract includes a ‘wide area network’ linking together various different public sector sites including 200 schools across the county.

Norfolk County CouncilCapita has also added a £6m contract from Norfolk Council, under the Department of Digital, Culture, Media & Sport’s Local Full Fibre Network (LFFN) programme, to upgrade the county’s current hybrid network. This will be rolled out across 230 schools and 108 public sector buildings, including council offices, libraries, and fire and rescue sites.

The provision on high speed connectivity in rural areas is vital to public service delivery and will be a capability that Capita will be looking no doubt to provide in other similar Counties. Whilst a pretty small contract for the firm, Capita has been quiet on the contract wins front of late, so will be glad to have got this one over the line.

Border forceIn another boost for its Technology Solutions Division, Capita has landed a £3m deal to install and support the voice and data comms service to the Border Force Maritime Fleet of five Cutters. This is fleet of boats that patrol British waters looking for prohibited goods.

Posted by: Marc Hardwick

Tags: contract   communications   Capita  

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