When CEO Jonathan Brassington started LiquidHub with co-founders Robert Kelley and Leighton Yohannan in 2001, they envisioned it as a scalable alternative to Accenture or IBM. Coming from Internet professional services, they were able to self-fund the venture and generate sales immediately.
“We already had a stellar reputation as a rising star in the Philadelphia technology community and we were able to get out of the gate very quickly and get our first few clients, then use traditional bank financing,” Brassington says.
There were bigger opportunities out there, and investment capital has helped LiquidHub become a global player with a footprint reaching New York, Boston, San Francisco, Charlotte, Amsterdam and development centers in India.
By adjusting strategy to address market demand, LiquidHub has doubled annual sales in the last three years to reach $125 million and was named one of America’s Most Promising Companies by Forbes in 2014.
Set the stage for growth
Companies commonly face a choice between steady, sustainable growth with internal capital or seeking outside funds to accelerate the process. Brassington says it was key to LiquidHub’s founders to first build a business that was financially sustainable in and of itself.
“Fundamentally, we thought that we could continue growing our core business with the operating cash flow of the existing business, but to accelerate growth and scale having some investment power on the balance sheet would be advantageous. So that drove a shift in strategy,” he says.
Brassington says LiquidHub recognized it could go from being a niche player to competing with the top tier companies in the industry. Investment capital has helped LiquidHub attract a client list that includes Vanguard Group, Novartis and Comcast.
Earlier this year, LiquidHub was infused with another round of cash, a $53 million investment led by ChrysCapital. Brassington said the $2.5 billion equity firm has alignment with LiquidHub and adding capital has not resulted in any loss of control.
“We’re still a majority employee-owned company,” Brassington says.
Investment capital has been used to fund key acquisitions to expand LiquidHub’s services and footprint.
“There are complementary capabilities areas and intellectual property strategies we wanted to pursue, and we felt that having a robust balance sheet made a lot of sense,” he says.
While LiquidHub has the ability to broaden its focus and build on the other 10 percent of its business that services retail, media, telecommunications and other industries, Brassington says the short-term strategy is to continue to concentrate on health care and financial services.
“We are starting to enjoy so much digital transformation activity in financial services and health care. We’re trying to maintain that core focus, recognizing where we are relative to our size and where we can best manage or channel investments,” Brassington says. “But I certainly think we need to look at our M&A strategy to launch or accelerate a retail vertical, as an example. On the other hand, we could certainly build a business 10 times our size by focusing just on financial services and health care. Those two sectors account for probably 40 percent of global IT services spent.”
Listen to your clients
In order to be successful, companies need to adopt business plans to address client needs. Brassington says the business world is transitioning from the information age to the age of the customer, which has become the major driver in dictating LiquidHub’s go to market strategy.