VFA provides different software and services for companies to manage their facility assets and for capital planning. Companies can use VFA’s facility assessment services, Web-based software products, and business consulting services to manage around three billion square feet of real estate. The company’s flagship product, VFA.facility, manages real estate assets for corporations and educational, government, and healthcare organizations.
VFA’s president and CEO, Jerry Kokos, studied at the U.S. Coast Guard Academy and spent the next nine years on active duty, attaining the rank of lieutenant commander. After finishing his MBA in the 1980s, he left the Coast Guard to enter the corporate world and worked for mini-computer companies like Digital Equipment Corp and Prime Computer and later as an executive vice president at a division of First Data Corp. Kokos joined VFA and grew it from a $3 million company in 2000 to a $31 million company in 2009.
Unlike classic startups, VFA was created as a spin-off from Vanderweil Engineering. Previously, large organizations employed architectural and engineering firms to perform facility assessments. But the reports that came out of these assessments were static and quickly became outdated and inaccurate. Also, since these same firms were often contracted to perform the facility maintenance work and upgrades, customers did not always get unbiased reports. This caused the company to have a rocky start, and Kokos was brought in to turn things around in 1999. Vanderweil decided to spin off an independent company to address this.
The company was initially funded by the Vanderweil family and later used VC funding via Edison Ventures for expansion and growth. VFA is a profitable and is not seeking to raise additional capital unless any acquisitions are on the horizon. When VFA was founded, the main competition came first from architecture and engineering firms and second from a handful of smaller software companies.
Real estate is the second biggest item on an organization’s balance sheet, and the company’s VFA.facility Capital Planning and Management software system (CPMS), helps organizations to be proactive in assessing risk and saving money related to their facilities. With the release of VFA.auditor 2.0 in January 2010, VFA introduced a new content-driven facility self-assessment platform that is designed to improve the facility data collection process and allow organizations to capture both condition and non-condition data on all types of facilities more cost effectively.
The company’s goal is to develop a one-stop shop for capital planning solutions for its customers. It has done so by focusing on innovation to achieve success, managing over 3 billion square feet, and providing solutions for 450 customers. VFA believes that one of its key differentiating factors is the accurate cost estimations in VFA.facility, based on RS Means industry standards.
Perhaps the most important aspect that sets VFA apart is its focus on objectivity. The company gathers facility condition data and identifies recommended actions to improve the condition of existing buildings, but it does not carry out those recommendations. Since it is not a design and construction company, VFA’s objective, third-party position may give customers greater confidence in the data gathered and enables them to get funding, internally and externally, to implement the recommended actions.
VFA has an annual addressable U.S. market of over $750 million. Worldwide, the number is estimated to be at least twice that size. The company primarily targets VPs or directors of facilities and real estate and organizations with a minimum of 1 million square feet of facilities. Target markets include banking, corporate, federal, state and local government, healthcare, higher education, K-12 education, and pharmaceuticals. Organizations with large, complex portfolios that are geographically dispersed are the most suitable customers for VFA. Initially, the company focused exclusively on the higher education sector and expanded incrementally into additional areas. Its first contract with the federal government was with General Services Administration. From there the company expanded into other federal agencies, state and local governments, and other verticals.
VFA’s pricing model is based on square footage. The company currently has over 450 customers, including the General Services Administration, Navy Bureau of Medicine and Surgery, State of Missouri, Commonwealth of Virginia, Ontario Health System, University of Texas – Austin, the British Broadcasting Company and more. In 2009, VFA saw profitable growth of 20% with $28 million in revenues, and it added 37 new customers. It has 201 employees worldwide and a backlog approaching $40 million.
VFA plans to expand geographically, to continue its growth in North America, building on its success in Canada. The company has expanded to the UK, where it has two major anchor customers, and it plans to penetrate the market in Europe and beyond. The current plan is to grow to a size and value that would allow for multiple exit strategies.
In 2009, VFA was named to Software Magazine’s Software 500 list of the world’s top software and service providers for the seventh consecutive year and selected for the Best of SaaS Showplace (BoSS) Award. It was also selected as a finalist and received a highly commended certificate for FM Excellence in a Major Project as part of the 2009 British Institute of Facilities Management (BIFM) International Investors Awards for its work with the BBC to audit and strategically manage the broadcaster’s real estate.
This segment is a part in the series : Deal Radar 2010