Notable Trade Sales That Rewarded Their Founders

Good businesses grow through acquisition and for every deal there’s a hard-working vendor. Nick Mulcahy, Jonathan Keane, Gerry Byrne and Ed Farrell review some of the major trade sales in 2023 and the stories behind them

When it comes to quick start-up wins, it’s very hard to trump Workvivo, established by John Goulding and Joe Lennon in

May 2017. The duo, who previously worked together at CoreHR, initially bootstrapped their venture – a software platform for businesses to manage employee engagement – before bigname investors took an interest. With steady growth, and household name customers like Amazon and Ryanair, the start-up’s brief independence concluded in April 2023 when Zoom, the US video conferencing giant, acquired the company.

Zoom paid $215.8m in cash (€197m) to buy the loss-making Cork company. The goodwill element of the deal was estimated by Zoom at €165m, while intangible assets of developed technology and customer relationships were valued at €26m. Other net assets acquired had a value of €6m.

It was an incredible outcome for the founders, their backers, and the Workvivo employees. Company filings suggest that total capital invested in Workvivo in December 2022 was €28m, and the company booked a net loss of €11m in 2022 on sales of €10m. Eric Yuan, Zoom’s chief executive, was prepared to pay x20 times turnover for Workvivo because he sees it as strengthening the Zoom offer to corporates.

Yuan was an early Workvivo enthusiast, and he invested in the startup in a personal capacity in 2019. His stated rationale for acquiring Workvivo was to offer Zoom customers a unified platform that keeps knowledge workers and frontline employees informed, engaged, and connected throughout the workday, regardless of in-person, remote, or hybrid work style. Yuan reported recently that American retailer Dollar General is deploying Workvivo’s platform for its c.190,000 employees.

When Workvivo was sold to Zoom, John Goulding (51) was the largest shareholder, with a stake of 48.1%, according to company filings. Joe Lennon (38) owned 16.1% of the equity, with staff owning 5.5% through a nominee company. Venture capital investors Tiger Global (24.0%) and Frontline Ventures in Dublin (3.7%)

Left: Workvivo founders John Goulding (right) and Joe Lennon Right: John Goulding and Joe Lennon pictured in 2018, shortly after Workvivo launched

also did very well from the deal, the company filings suggest.

The most amazing outcome from the Workvivo journey was definitely the upside for Joe Lennon, who charted the experience online in his blog. As Lennon related, seven years ago he was down on his luck. “My wife Jill and I had gone from both being well paid, with good benefits, two salaries and no kids, to no income, no benefits and two young children – all in the space of 18 months,” Lennon recalled.

In September 2007, recently graduated software engineer Lennon had joined Core HR, an enterprise payroll and HR software company based in Ballincollig. John Goulding joined as chief operating office from EMC at the same time, and guided Core HR to its sale in 2015.

Lennon and Goulding got to know each other, but the younger man jumped out of Core in 2014. Lennon wanted to build his own business and teamed up with e-book pioneer Gareth Cuddy so he could learn about start-ups.

After 18 months with Vearsa, in 2015 Lennon decided to scratch his teenage musical itch with Subwoofr, an open source music platform that would enable artists to sell digital subscriptions directly to their fans. Lennon rounded up €150,000 investment, some artists, and interest in the UK from indie labels.

“I learned the hard way just how quickly things could fall apart,” Lennon related in his blog.

“My co-founder left unexpectedly, seed investment was not forthcoming, and the product went in a completely different path to the original concept as we struggled to stay alive. It was a crazy 18 months, a huge learning experience, but not necessarily something I wanted to ever do again. To this day Jill blames my grey hairs on Subwoofr.”

Lennon’s luck turned at the start of 2017 when he attended a Core HR leaving party for Goulding. They agreed to catch up over a coffee at the 12 Tables restaurant in Douglas, where the pair decided they should go into business together.

As Lennon related: “There was no product, no team. We didn’t even have an idea at this point. In spite of this, both of us were confident from day one. Between the two of us, we had everything we needed to build a great software company.

“We started off by defining some guiding principles for what we wanted to achieve. Both of us – for very different reasons – had no desire to report to a board of directors or investors. We wanted to build a great, profitable company that would be fun, rewarding and allow us both to provide a good life for our families. That was it, nothing more than that.”

From that tiny acorn, Ladder Technologies Ltd was established as a freelance recruitment platform. The duo soon pivoted to the more sensible idea of employee engagement, encouraged by customers such as Morgan McKinley, Staffordshire University, Trigon Hotels, and Voxpro. The rest, as they say, is history.

It was just three years after incorporation that Workvivo finalised its first seed investment round in February 2020. By waiting until they were very clear what Workvivo was all about, and its direction of travel, the founders were able to retain sizeable equity stakes as Frontline Ventures ponied up €3m.

More importantly, Frontline introduced Workvivo to Tiger Global, who invested €11.3m and followed on with €12.5m two years later. Seizing that scaling opportunity was sufficient for Eric Yuan to decide that the Cork entrepreneurs know what they’re doing.