Is that the unfamiliar smell of a European tech IPO in the air? Quite possibly, although let’s not get too far ahead of ourselves: Blur Group, the London-headquartered B2B Services Exchange, has appointed Singer Capital Markets to advise on its next funding path — a path that may well include a listing on the AIM market of the London Stock Exchange, says the company.
That, it goes without saying, would be pretty unusual for a European tech startup and maybe kind of crazy post-Facebook and in the current climate. But then, blur Group is already doing things a little differently, having shunned the more traditional VC model in favour of assembling an all-star group of more than 30 angel investors who have invested just shy of $2 million.
Going public is something that “we have been considering, researching and gaining feedback on for a year”, says CEO and founder Philip Letts. And that feedback suggests “there may be strong appetite, even in these times, for the right kind of tech company.”
The right kind of company, says Letts, is one that is already an international leader with “strong, predictable metrics, quality scaling and a large, growing customer base.” He is, of course, referring to blur Group.
To that end, the B2B exchange has been growing steadily since it launched for the creative services in 2011. Earlier this month, it expanded into Technology for those seeking IT expertise, and has grown its customer base across all of the 8 verticals it now operates to 500 businesses who use the platform to procure services, made up of SMEs and a number of international, blue-chip companies, such as Berlitz, Harvey Nichols, Coral, Ministry of Sound, GE Healthcare and Tyco.
To service those customers, it has amassed over 20,000 experts, agencies and firms, while 1,000 briefs have been accepted by the platform, with the total value of those briefs exceeding $14 million, averaging $10k each, up from $2.5k in 2010.
The company is less keen to talk revenue, however, saying only that it has been “growing considerably” quarter on quarter. (That’s something that will need to change should blur Group begin courting the public markets.)
As for its potential to become a true European success story, it probably doesn’t do any harm that blur Group is a B2B proposition, not a consumer web company, which tend to fare less well this side of the pond.
“I think the U.S. tech startup scene is really well suited to B2C tech with such a large homogenous market, big money from Angels/VCs and such a marketing bent”, says Letts. “Building a B2B tech company takes different skills and we probably have a slightly more level playing field over here.”
Given blur Group’s roots in Creative/marketing services and its exchange approach, he also says that being located in London also “seemed to suit it pretty well”.
“Mind you we have tried to take the best from what we learned in the U.S. and combine it with the strengths of European tech. Seems to be working out but you have to be a European player that can be as successful in the U.S. market as anywhere else. That takes focus, experience and commitment.”
Over a third of blur’s briefs and customers come from the U.S. and its Dallas, Texas office is growing “really fast”, says Letts.
Returning to the topic of a potential IPO, it’s possible, of course, that Singer could come back advising against one. Therefore, wouldn’t it just be easier to raise a Series A round? Or, perhaps, more to the point, why hasn’t the company already done so?
“We have never really had any trouble raising money and indeed have been approached all along by a number of VCs interested in investing”, says Letts. “I guess we were lucky in that we always had the option to go direct to Angels and so took that.”
The VC-route, he says, is probably best suited if a startup is seeking a trade sale as an exit within a few years, perhaps less so for an IPO.
“We thought the Angel to IPO route was more interesting in this new environment and more relevant for us. Probably more appropriate (assuming you can pull it off) for a company that wants to be a long term independent leader in its space – and ours is pretty big.”
Big enough for a European IPO? Let’s hope so. In the meantime, inhale while you can.