predict which employees or departments might need more attention.
Convercent’s goal is to make a product that’s more efficient and can show a positive return on investment as the savings it generates begin to exceed what companies spend on compliance. Software licenses are $50 per employee per year, with custom pricing available for very large clients.
Compliance and governance is a $3.6 billion market, and Convercent already has 450 customers, according to Quinlan. The company had revenue of $3 million last year, and Quinlan said it will at least double that this year.
Quinlan said Convercent’s focus now is developing its customer base and adding employees. The most recent investment money will go toward scaling up operations as the company emphasizes rapid growth over immediate profitability. The goal is to set Convercent on the growth path that software-as-a-service companies like Rally Software and Tableau Software have followed recently to IPOs.
It’s an ambitious goal for a startup, but Convercent isn’t quite a typical startup—and its management team has a track record of success.
Convercent’s corporate roots go back to the 1990s and a company named Business Controls Inc. BCI provided hotlines and case management software for companies trying to minimize and track employee misconduct.
BCI had a healthy business that had about 400 customers and 30 employees at its peak, former owner and president Steven Foster said. The company was successful at the old way of doing compliance by collecting tips and leading follow-up efforts, but it seemed to have maxed its revenue out at a few million each year.
“We knew we had great technology, but we needed to renew and refresh it,” Foster said. To move BCI forward, it might have needed new management and investors as it made a big pivot.
As BCI was trying to set a new course, Quinlan’s previous company, Rivet Software, was also going through a major transition. Rivet develops financial reporting and analytics software public companies use to file information with the SEC.
During Quinlan’s tenure as CEO, Rivet grew into a market leader with $60 million in revenue. Rivet worked with more than 1,500 public companies and amassed an impressive number of awards from publications like Inc. and Red Herring.
But in 2011, Quinlan left Rivet following a disagreement with its founders and chairman about the company’s long-term strategy. Rivet’s chief operating and information officers followed Quinlan, and together they formed Nebbiolo Ventures, an investment firm.
They still wanted to run a tech company, Quinlan said, but they didn’t want to start a company from scratch—and they wanted ultimate control.
As Quinlan and Foster tell it, they found each other through contacts in Denver’s tech industry. BCI was an attractive takeover candidate for Nebbiolo Ventures because it was generating revenue and was in a business-to-business market that was overlooked but offered potential for rapid growth, Quinlan said. So important building blocks were in place.
Foster also was willing to sell the company and step aside as Quinlan and his Nebbiolo partners moved into the top management positions.
“It was a little scary, a little new, but it was the right thing for us,” Foster said. He remains an investor and board member.
BCI was renamed, reorganized, refocused on cloud-based software, and relaunched January 29 as Convercent. Azure Capital Partners and Mantucket Capital are investors.
