Civiteq: The Scale-Up Story
The Scale-Up Story is a blog series that shines a light on the real journeys of tech SMEs who’ve successfully secured funding to grow. These are honest, personal stories written by founders and leaders who’ve navigated the uncertainty, the pitches, the rejections, and the breakthroughs.
Introduction
Hi, I'm Tony Summers, one of the founders of Civiteq, a management consulting company helping public sector organisations to optimise their investment in technology. We do that across the whole lifecycle of enterprise level technology investments, from early-stage strategy development and advisory, through to full implementation support, with a particular focus on user adoption, process efficiency and benefits realisation.
The company was formed ten years ago in 2015 and currently deploys up to 100 consultants into customer organisations at any given time, ranging from short-term strategy advisory projects through to multi-year, multi-£million programmes. Historically our strongest market has been local government, and that remains our core customer-base, but we are currently pursuing an expansion strategy into the wider public sector, with a particular focus on central government.
The Turning Point
We experienced fairly rapid growth in our first four years and by 2019 had starting to explore investment options to facilitate the exit of some of our original founders, to provide growth capital for the company's future expansion and to incentivise the management team to continue to grow the company.
At that point we engaged an experienced advisor to support us through the process of engaging with the investor community, prepared our prospectus to support that engagement and commenced the process of talking to investors in early 2020. We all know what happened next in the world ! Our plans were quickly put on hold as, like everyone else in the business world, we were suddenly thrust into the process of navigating the challenge that Covid-19 posed us and our customer-base. It's fair to say that 2020 and 2021 were challenging years, but we navigated through the period and came out of it having retained a successful and well-regarded business in our sector that was able to respond when customer demand started to return to pre-Covid levels.
The Road to Funding
Our investment plans had been put on the back burner during the immediate post-covid period while we returned to a period of strong growth. So, it was a little bit of an unexpected surprise when at the start of 2022 we were suddenly inundated with approaches from firms interested in us as a company and we embarked on multiple discussions with private equity companies and M&A advisory firms who'd approached us without really having a strategy in place at that point. We had no retained advisors at this stage and these meetings were handled by myself and a fellow founder. It quickly became clear that there was real and tangible interest from i investors wanting to acquire a stake in the company and our engagement focused around a couple of those direct PE firms and investment houses.
One of those was BGF, who we'd originally spoken to in 2020, and we eventually settled on them as our preferred investor, due to our sense of cultural fit with them as a firm and our own values, which was informed as much by the wider Leadership Team as by the founders' requirements.
Lessons Learned
I think it's fair to say that we were completely unprepared for the level of interest and consequent impact on the founders initially, and the subsequent impact on the Leadership Team, of the investor discussions and the full due diligence process, in particular.
In hindsight, I think I’d advise anyone contemplating an investment round to firstly engage professional advisors to help focus the investor discussions and prepare the initial management information in advance. I’d definitely say that we could have short-cut some of initial conversations if we’d understood more about the investor community and they requirements and could have reduced the burden of the due diligence process on the leadership team if we'd been better prepared.
Secondly, I’d encourage any founders looking for investment to really spend some time thinking about the purpose for seeking investment and what they are looking for out of the investor conversations before launching into conversations. Part of that process is also thinking through what investors might bring to the table to help you in your growth journey, beyond the investment of funds.
Finally, I’d advise involving the wider leadership team in the process as early as possible as they are going to be key to the decision, particularly in assessing whether the cultural fit is right.
What’s Next
Our investors have been highly supportive and 'patient' investors since we completed our investment in 2023, despite challenging market conditions over the last two years. We are currently in a second investment round with them to provide additional growth funding to help accelerate our entry into new markets, which we're really excite about.
One Tip for Other Founders
I think the biggest single tip I can give, from my own experience, is to think through what you want out of investment before embarking, prepare your case for investment and gather the necessary corporate information that investors will require, before you enter into the process. The due diligence process will be distraction to the normal running of your business and you can minimise that disruption as far as possible by being prepared before launching in!
Authors
Tony Summers
Tony is the Chief Executive and one of the founding directors of Civiteq (formerly Socitm Advisory) a leading management consultancy with a focus on supporting public sector organisations to transform their services through investment in technology.
