SOFTMOTIVE

$25m growth capital investment for Softomotive

Case Study: Softomotive

Softomotive (www.softomotive.com), acquired by Microsoft in May 2020, was one of the investments that Oliver Thomas (embed Expedition bio page link) led and managed through to realisation at Grafton Capital- the deal-by-deal investment platform he co-founded with his long time friend Ed Barroll Brown in 2014.

Marios Stavropoulos and Argyris Kaninis (now investors in Expedition Growth Capital Fund I), founded Softomotive in Athens, Greece in 2008. They self financed its profitable growth until deciding to bring on $25m from their first outside investor in September 2018.

Like the founders that Expedition is focused on partnering with today, Marios and Argyris found themselves with a use rather than a need for capital. They had patiently built their Robotic Process Automation (“RPA”) software, away from the pressures of venture capital and could have continued financing their 50-100% growth trajectory from their very attractive cashflow margins.

However, their product was also being selected by a number of large enterprises after rigorous assessments against much better capitalised competitors. The brand strength and go-to-market sophistication of these competitors was formidable, but Softomotive’s product architecture, built with the desktop user in mind, was a powerful and hard to replicate differentiator in a growing number of use cases. Marios and Argyris saw how valuable it could be to achieve 5 years of growth and business transformation in 2 – 3 years, but only wanted to do so with the right partner.

After numerous meetings and discussions with Oliver, and referencing with the founders at BOARD International (www.board.com) – another bootstrapped company where Oliver had led a similarly sized minority investment at Grafton- Marios and Argyris built the confidence to proceed.

On completion of the investment in September 2018, the shareholders began an ambitous transformation. Guy Berruyer, former CEO of Sage plc, (also now an investor in Expedition Growth Capital I) was appointed Chairman of the board, providing valuable mentorship as Marios and the team pursued a level of organisational growth and development that they had not yet experienced. The company was able to achieve this organisational change whilst also shifting from the upfront pricing model that had so effectively financed growth to date, to an annual licensing model. The investment also signalled clearly to the market place that Softomotive was a globally ambitious business, focused on building and realising value- something that was noted by influential industry analysts such as Gartner and Forrester as they dramatically improved Softomotive’s positioning in their subsequent market reports.

Softomotive was in the midst of these transformations when Microsoft approached the company, seeking an acquisition to accelerate their move in to the burgeoning RPA category. With support from Oliver and his team, management were able to engage bilaterally with Microsoft to explore their interest, whilst also executing on their ambitious plans. This culminated in the sale of the business in May 2020, with Microsoft seeing great strength in Softomotive’s product; and a greater alignment of vision than they found in the various “unicorns” that until that time commanded far greater visbility in the category. Softomotive is now a core element of Microsoft’s Power Automate platform, and one of the only components of Microsoft Office that is developed outside of North America.