Sramana Mitra: Your customer base is enterprise customers?
David Steinberg: Yes, our customers are enterprise.
Sramana Mitra: You were just talking about specifically how you’ve differentiated and brought the pieces together using, to some extent, a roll-up strategy. Is that part of the strategy now?
David Steinberg: No, we’re not a roll-up strategy. A roll-up strategy is when you buy a large business and consolidate it to create a merging of SGNA, HR, Legal and Accounting on a cost savings methodology. We do none of this.
Sramana Mitra: You did buy two companies to start it in the first place. You started this company by acquiring two assets that were under-leveraged, and you put good strategy and good execution on it. That company is working and you have a lot of enterprise customers right now. You have good solid revenue. What is your next level strategy? More of the same or is there anything else that you want to discuss?
David Steinberg: They were not under-leveraged. They had no debt. They were actually undervalued assets. We started the business before we ever bought them. We actually started the business around data acquisition called Digital Publishing Corp in which we focused on building out data before we ever even bought another company. We started the company in October 2007. We didn’t do our first deal until May of 2008. We operated up until we did our first deal.
From a value proposition perspective, our business is growing just about at 100% organically. We grew 120% in the first quarter of this year over the first quarter of last year. We’re at scale. We should do just about $200 million this year, up from just over $100 million last year. None of that is acquired. From a growth strategy perspective, I think we’re much more focused on what we’re doing organically than buying other businesses although we always look for tuck-in acquisitions. When we buy a company, it’s doing a few hundred thousand dollars at most.
Sramana Mitra: So it’s more technology acquisition?
David Steinberg: Yes. We built this thing called a hub which sits between us and all of our customers. Think of it as a technology interface that is a platform that allows our customers to plug-in through APIs. So when we buy new technologies now, we can plug right into the hub and we can turn it on for all 700 of our customers at once.
Sramana Mitra: What has been your financing strategy? Besides the $10 million that you put in the beginning, have you raised further financing or is this all organic growth from then on?
David Steinberg: We announced two years ago that we did a $70 million capital raise with Greenhill Capital Partners and Madison Capital. It was $50 million in debt and $20 million in equity. We’ve used that to move into what we are today. Back then, we were just a pure data analytics platform. Then, we bought the technology platforms, merged them together, and built the bunch ourselves. To put it in perspective, we have 250 full-time engineers who work for us, 78% of which either have a Ph.D. or graduate degrees in Computer Science. We’re very focused on technology building organically versus just buying. Greenhill Capital Partners did lead the round with $20 million in equity and then we did a $50 million debt facility with Madison Capital.
Sramana Mitra: Is your technology team based in your city?
David Steinberg: No, we operate on four continents. We have 350 full-time employees in India and 50 in San Mateo. The vast majority of our architecture is done in Silicon Valley. The vast majority of our programming is done in India.
Sramana Mitra: Great. Thank you for your time.