With major partners, Tech startup LeanKit expects to 'make a lot of noise'
FULLY ENGAGED, yet seemingly at-ease during an interview for this story, LeanKit Co-founder and CEO Chris Hefley said his five-year-old software company is, at least figuratively, about to "make a lot of noise."
LeanKit's software development and software-as-a-service (SaaS) visualization, execution, collaboration and scheduling tools provide adopters greater ability to track progress, priorities and problems in their projects, portfolios or enterprise operations.
Without such tools, "it's kind of the wild, wild West out there," said Hefley, who recently turned 39.
The "noise" that Hefley has in mind, it turned out, is only partly related to the fact LeanKit expects to pass the $5MM revenue mark this year -- or its plans to double its workforce from its current 52 to 100 or more, within 12 months.
Hefley disclosed two major business drivers: The company is "building a vertical market in Construction and Engineering via a close partnership with Oracle Primavera." LeanKit has heretofore worked mainly in the Manufacturing and IT verticals.
Also, said Hefley, Microsoft is partnering with LeanKit to provide a "seamless" LeanKit integration into the giant's offering of "new cloud-based developer tools," with that offering soon to be sold via Microsoft's Azure Marketplace. Hefley said the initiative represents "a significant new distribution model for us."
Unless further investment in its systems is required, LeanKit could reach cash-flow positive status in 2Q 2015, he said. Growth is now annualizing 250%, year over year, he said. It can step-up its entry into new verticals without affecting its breakeven projections, he noted.
"We think we can do something quite significant and large," Hefley said in smooth, even tones, during an interview Friday in the light-filled conference room of LeanKit's techno-fitted digs on 2nd Avenue in Franklin.
Asked whether "large" might mean reaching a longer-term target of, say, $50 million in annual revenue, Hefley said there's "quite a bit more than $50 million" to be earned by LeanKit in the enterprise IT-sector vertical, alone, and he's not inclined to think of LeanKit as anything less than a future $100MM business, he made clear.
Hefley said the $100MM mark can be achieved in the IT sector by itself, quite apart from additional gains makes in Manufacturing, Construction, Shipping/Logistics, Healthcare or other verticals. Hefley indicated that selling to the clinical segment of Healthcare is typically a tough slog. VNC notes that Hefley, as well as co-founders John Terry (COO), Stephen Franklin (CTO) and Daniel Norton (Chief Mobile Officer) all had HCA tours, earlier in their careers, according to LinkedIn.
The 110 or so equity holders on the company's cap table have put $10.1MM capital into the business, he confirmed, adding that much of the credit for recruiting capital goes to Kemp Maxwell, VP-business development.
The company's board is chaired by Hefley, and includes Chief Revenue Officer Tim Mulron, management consultant Siraj Sirajuddin and John Hamilton, former president of Deutsche Bank's DB Services Tennessee. Long-time advisor David Furse, of the Owen Graduate School of Management at Vanderbilt University, is a board observer, said Hefley. Furse had been LeanKit's primary mentor during its stay in Nashville Entrepreneur Center accelerator. LeanKit was generating about $10K per month revenue when it entered the EC, Hefley said.
Within 12 to 18 months, LeanKit will have a good sense of whether it should raise further capital or grow organically. At that point, Hefley acknowledged, some existing investors may choose to exit, but he's heard no such interest.
Perhaps a startup with traction emits financial pheromones. That would explain why Hefley said not a week goes by without LeanKit being approached by a venture-capital executive or their research staff.
As previously reported by VNC, LeanKit continues to have conversations with "premiere" firms in Silicon Valley, Boston and New York, Hefley said, as well as with other firms whose executives or researchers are in touch at least once a week. Regarding the run-of-the-mill calls, "we deflect most of them," he said.
In a 2013 VNC story, Hefley recounted the early days of the firm, and what he then saw as the difficult-to-impossible task of finding and attracting software-savvy institutional money from native Tennessee firms.
Hefley continues to build-out the organization. Though founded in 2009, the company had no dedicated sales-marketing staff until 13 months ago. This year, he said, it is stepping-up spending for sales and marketing staffing, after having built its own sales and marketing management system. Its workforce surge will also include developers, visual designers, quality-assurance staff, customer support and other employees, said Hefley.
Though Tech professionals' compensation has risen, "we know where all the Tech people hide," and LeanKit's believes it has created a culture that is attractive to the Techies it recruits. The real challenge now is recruiting effective Tech-sector sales and marketing folks, he said.
Meanwhile, Hefley has expanded his advisory team. Lawyers from Silicon Valley-based Cooley are now aboard, along with long-serving Tracy Kane and Harlan Dodson of Nashville's Dodson Parker Behm & Capparella. The company also plans to review its intellectual-property protection needs, he noted.
LeanKit continues to rely on McKerley Noonan for tax matters, and LBMC for audit, said Hefley. It banks chiefly with Pinnacle Financial and a few other banks.
LeanKit's marquee clients include Adobe, RollsRoyce, Siemens, Paypal and others. VNC