By Tom Ballard, Chief Alliance Officer, PYA
Just a few months shy of seven years after two college classmates founded a bi-coastal start-up named Cirrus Insight, they announced in late September a significant growth equity investment from Clovis Point Capital LLC.
In the case of the Knoxville region, it’s the latest in a series of significant deals – some very large and others somewhat smaller. Those on the high side were Warren Buffet’s Berkshire Hathaway that acquired what will eventually become a majority stake in Pilot/Flying J, the Discovery Channel that acquired Scripps Networks Interactive, and Regal Entertainment Group that merged with Cineworld Group PLC. Joining Cirrus Insight on the smaller scale was Domtar Corporation’s majority investment in Prisma Renewable Composites.
“After those three deals (Pilot, Scripps and Regal), people in New York and California started calling and asking about what was going on here,” Brandon Bruce, Cirrus Insight Co-Founder and Chief Operating Officer, told us. “Our region is definitely on the radar.”
The two Co-Founders (Chief Executive Officer Ryan Huff is based in Irvine, CA) had been running a process to find an appropriate partner before the three mega deals were announced and had about 50 exploratory conversations with investors.
“Those allowed us to pick-up ideas for the company and intelligence about the market and our competitors,” Bruce said. It’s one piece of advice he would offer to all Founders. “Be protective of your time, but understand that we benefitted from taking a lot of meetings,” both with investors and others.
The deal with Clovis Point Capital was something that Huff and Bruce had always envisaged.
From the outset, Bruce says that the two Co-Founders “talked about the oxymoron of searching for an exit while building a company,” something he compared to the fact that no one washes a rental car.
“When we started in December 2011, we thought software moved so fast that the timeline would be half as long as it has been,” Bruce said. “We thought we might have been an earlier target.”
Then, he adds with the dry wit and engaging manner that many of us have come to know and appreciate: “That was the opinion of two people who had never done it before.”
There was a definite upside to the longer time period. It gave Cirrus Insight a longer runway to build a stronger company and a team. There are currently 54 employees equally divided between the engineering operations in California and the marketing, sales and support team in Knoxville.
Bruce says the investment will provide the financial resources to take Cirrus Insight to the next level . . . double revenue again and again. He sees that coming through organic growth (“more of what we have been offering but faster” and through continued product development) and inorganic growth (“finding attractive targets to add customers, revenue and new technologies”).
“We did a couple of small ones,” he says in referring to acquisitions like its late 2017 one for Attach.io (see our teknovation.biz article on that announcement here). “We did not have the liquidity to pull-off big ones,” something that Clovis Point Capital brings to the table.
Bruce believes the deal is good for the company, the employees and the Knoxville region. For now, he’s focused on helping with the transition and continuing to be engaged in community-based activities.