We covered the launch of m-hance, the roll-up mid market business software provider backed by Jon Moulton’s private equity Better Capital firm, last November (see Mid market debutante: mhance). It was notable because it was formed from the acquisition of seven mid market (Microsoft-centric) players including Calyx Software and was being run by Mark Thompson whose former roles included that of MD of COA Solutions prior to its acquisition by Advanced Computer Software. It went on to acquire three sub divisions of Maxima in February this year.
The fear with roll-ups is that they sweat the acquired assets but do little to build their own IP. When we spoke with the company last week it was reassuring to hear that software development was very much on the agenda. Next week it will move to GA on its in-house developed Enterprise Social Network platform, and it has also built its own document management solution. These offerings are not going to make much of an impact on the overall market but m-hance is concentrating on selling them to its existing customer base of c2,400 customers so has a market to expand within. The Enterprise Social Network is also a Microsoft approved solution and is a formal ISV embedded solution for Dynamics GP so has potential for growth.
All in all young m-hance is coming along nicely –even making it onto The Sunday Times Tech Track 100 for the fastest growing tech companies over the weekend, with a revenue growth figure of 45% (2008 – 2011, i.e. taking the pre m-hance operation into account), and anticipated revenue of £22.2m in 2012. Management cites ‘strong’ organic growth but we expect the bulk of the growth is acquisition-based.