Grow­ing Hous­ton soft­ware firm lands $200 mil­lion in­vest­ment

Houston Chronicle - - TEXAS INC - By An­drea Le­in­felder an­drea.le­in­[email protected] twit­ter.com/an­drea­rum­baugh

“I sus­pect this time next year we will have done two ac­qui­si­tions that con­tinue to help us grow. This money is a lit­tle war chest for that.” Eric Elf­man, CEO of Onit

The Hous­ton soft­ware com­pany Onit has raised $200 mil­lion in pri­vate eq­uity to fuel its growth in new mar­kets, prod­ucts and deals, the com­pany said.

Founded in 2011, Onit cre­ated a soft­ware plat­form — and a host of in­dus­try-spe­cific prod­ucts — de­signed to help For­tune 500 com­pa­nies au­to­mate and track em­ploy­ees’ work. Its cus­tomers in­clude Jaguar Land Rover, Bax­ter Health­care and agri­cul­tural pro­ces­sor and food in­gre­di­ent provider Archer Daniels Mid­land Co.

Onit had pre­vi­ously raised $17 mil­lion over three rounds be­tween 2012 and 2015 be­fore the Los An­ge­les pri­vate eq­uity firm K1 In­vest­ment Man­age­ment agreed to make this lat­est in­vest­ment.

“We’ve seen the com­pany more than triple its cus­tomer base and rev­enue in two years, and we have tremen­dous con­fi­dence in the man­age­ment team’s long-term vi­sion,” Neil Ma­lik, manag­ing part­ner at K1, said in a state­ment. “It’s ex­cit­ing to part­ner with a team that pi­o­neered the en­ter­prise le­gal man­age­ment soft­ware space nearly 20 years ago and to now see how their in­no­va­tive so­lu­tions are trans­form­ing the way For­tune 500 com­pa­nies and le­gal de­part­ments op­er­ate.”

Onit, which is pri­vately held, has grown quickly, more than qua­dru­pling its work­force in just un­der three years, to 110 em­ploy­ees in De­cem­ber from 24 in Jan­uary 2016. The com­pany said it is on track to hit $100 mil­lion in rev­enues over the next few years. K1’s back­ing will spur faster growth, some of it by ac­quir­ing other com­pa­nies, said Onit CEO Eric Elf­man.

“I sus­pect this time next year we will have done two ac­qui­si­tions that con­tinue to help us grow,” Elf­man said. “This money is a lit­tle war chest for that.”

Elf­man said its soft­ware ad­dresses a fun­da­men­tal need of com­pa­nies: help­ing em­ploy­ees work more ef­fi­ciently.

Let’s say some­one in sales at a large For­tune 500 com­pany wants to sell soft­ware to an­other com­pany. That em­ployee would email a lawyer ask­ing for a con­tract. The lawyer would then cre­ate a con­tract and email it back to the em­ployee. Ad­just­ments and su­per­vi­sor ap­proval would also be through email.

If a lawyer is work­ing on 200 such con­tracts, it be­comes dif­fi­cult to track who is wait­ing on what and which ques­tions re­main unan­swered. And if that lawyer leaves the com­pany, all of the con­tract in­for­ma­tion could get lost once his or her email ac­count is closed.

With Onit, that sales­per­son opens a form through Onit and fills out a re­quest. Onit will use the com­pany’s data and for­mer con­tracts to au­to­mat­i­cally cre­ate a rough draft, which the lawyer will then fi­nal­ize. Ev­ery­thing is saved in Onit, and ev­ery­one can ac­cess the con­tract in one cen­tral place. And that’s just one ex­am­ple. “We’re not just a sin­gle prod­uct for a sin­gle mar­ket,” Elf­man said. “We’re a plat­form with lots of dif­fer­ent so­lu­tions, so we can con­tinue to add so­lu­tions to solve dif­fer­ent prob­lems.”

Matthew Lewis / AFP / Getty Images

Jaguar Land Rover is one of the com­pa­nies that use a soft­ware plat­form cre­ated by Onit, a Hous­ton firm that re­cently net­ted a $200 mil­lion in­vest­ment.

Daniel Acker / Bloomberg

Agri­cul­tural pro­ces­sor Archer Daniels Mid­land Co. is an­other com­pany us­ing Onit’s soft­ware, which au­to­mates and tracks em­ploy­ees’ work.

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