The sale of NZX-listed Diligent to a US company for a fraction under $1 billion in 2016 is one of the most storied exits in New Zealand software history. Now, a start-up that’s in the same market – boardroom governance software – says it’s about to overtake Diligent, at least by one measure.
BoardPro founder Brett Herkt says his company has around 400 customers in New Zealand to Diligent’s 450 and “they’ve saturated their market. At our current growth rate, we’ll overtake them within two months.“
Herkt is the first to admit it’s not an apples for apples comparison. Diligent is aimed at corporate boards.
BoardPro is aimed at small-to-medium businesses and nonprofits, and doesn’t offer a number of its larger rivals features, such as those for dealing with NZX compliance issues – with the flipside being that it is, as Herkt bills it, a lot more user-friendly and suits time-poor directors without software smarts.
And BoardPro is a tenth of the price – it costs between $1200 and $3300 a year, depending on the the number of committees catered to, with schools and nonprofits getting a 20 per cent discount.
BoardPro is now in nine countries, but its main market beyond New Zealand is Australia, where Queensland Sport, Volleyball Australia, Surf Lifesaving NSW and Citipointe Church are among its marquee customers.
He says BoardPro should be in the black by the end of this year.
Herkt says there are around 1.1 million small or nonprofit organisations in the English speaking world that need to be governed, or an addressable market of around $1.7 billion.
His five-year plan is to hit $100m annual revenue.
He says he’s already been contacted by Insight Venture Partners – the New York-based investment company who bought Diligent for $943m in 2016. For the moment, they’re just keeping tabs, and Herkt is more bemused by the approach than anything else; he doesn’t see an exit until well down the track.
The softly-spoken Herkt doesn’t immediately seem like someone who to spearhead a startup or hold his own in M&A, but in fact he’s been here before.
He was chief executive and a shareholder in Auckland ISP and data centre operator Maxnet, growing it from a $2m to $15m business before its sale to Vocus in 2012.
His track record helped him to attract a relatively heavy-hitting board for the embryonic BoardPro, including Gilligan Sheppard principal and NZ Shareholders Association alumnus Bruce Sheppard and Kevin McFall, one of the co-founders of email security firm Mail Marshall, sold to US company NetIQ for US$45m in 2002.
What’s next for the nine-strong BoardPro? Herkt is lining up a raise – probably around the $3m mark – for later this year.
In his quiet way, Herkt will use the funds to continue his quest for world domination.