AppDirect, which operates marketplaces for the sale of subscriptions to Web-based software, is acquiring technical support provider Radialpoint, which helps businesses work out the bugs once they’ve purchased new apps.
San Francisco-based AppDirect is flush with cash from two fundraising rounds last year totaling $190 million, and acquisitions are part of its strategy to build a dominant global position as an organizer of online commerce in software operating in the cloud. The company did not disclose terms of the Radialpoint deal—AppDirect’s fifth acquisition since it was founded in 2009 by Canadians Daniel Saks and his co-CEO Nicolas Desmarais (pictured above, Saks at right.)
AppDirect directly serves companies that use its software to set up their own online storefronts to sell business applications. That includes software makers themselves, such as Microsoft, as well as office supply outlets like Staples, and telecommunications companies including AT&T and Comcast. In turn, those marketplaces help more than a million businesses find software and arrange for related services, such as combined billing for all their app subscriptions.
The addition of Montreal-based Radialpoint brings a “missing piece” to the array of services offered by app stores using AppDirect’s technology infrastructure, Saks says. Tech support—including human beings to talk to—is often fragmented among the various companies that make Web-based software possible, he says. That includes the customer’s Internet service provider, their hardware manufacturers, and the maker of the software itself. When something goes wrong, business users are often bounced around from one support network to the other as they try to trace the source of the problem.
“There should be one place you can go to help you through these challenges,” Saks says.
Radialpoint, founded in 1997, began by helping consumers tackle their IT snags. But its clientele came to include small and medium-sized businesses that were transitioning their operations to Web-based software, says Radialpoint CEO Warren Levitan.
“We’ve been sort of riding that wave,” says Levitan, who will remain at the helm as Radialpoint becomes an AppDirect subsidiary. The company sells its technical support services in two ways. It licenses its customer support software to businesses that have their own help desk staffers, who can be trained and supervised by Radialpoint. For companies that want to outsource customer service more fully, Radialpoint contracts with partners that provide the staffers who use its tech support software.
Saks says AppDirect’s customers can now offer Radialpoint’s tech support through their proprietary marketplaces. Radialpoint’s clients may also become AppDirect customers, he says. The addition of Radialpoint’s 80 employees brings AppDirect’s staff count to 500. Both companies are hiring. Saks declined to disclose revenues for the two companies.
It’s just a coincidence that three of the companies AppDirect has acquired are located in Canada, Saks says. AppDirect searches the globe for the best businesses to annex, he says. But the company’s ties to Canada run deep, he adds. Radialpoint’s co-founder and chairman, Hamnett Hill, was one of AppDirect’s early angel investors. AppDirect already has an office in Montreal—an advantageous outpost for a California-based company doing business both on the East Coast and in Europe. And Saks traces the original idea for AppDirect to his father’s experiences with adopting software to help run the family’s furniture store in Niagara Falls, Canada. A software salesperson eased him through it.
AppDirect’s other acquisitions were Ottawa, Canada-based billing services company jBilling in 2012; Boulder, CO-based Standing Cloud in 2013; San Francisco-based data dashboard maker Leftronic in 2014; and in 2015, AppCarousel, an operator of app stores for connected devices that has headquarters in Calgary, Canada.
AppDirect is continuing to evaluate options to build, buy, or bolt on augmented features that will draw business customers to the marketplaces it operates, Saks says. AppDirect looks for leading, profitable companies that generate cash flow, he says.
“We’re always looking proactively at acquisitions,” Saks says.
