The business actually dates back to 1999, but it’s has been growing rapidly lately; in fact we’ve been more than doubled revenue in each of the last two years. We’ve been a bit more focused, without trying to be all things to all people, and we’ve clearly found our niche. That’s just been validated by a multi-million pound contract win from Sainsburys, who have chosen Wesupply as their B2B platform to deal with 4,000 of their suppliers. The process has been going on for over a year, with the RFPs, presentations, short-listing, and more recently the contract process, which has been very time-consuming. But the deal lasts for five years – and we expect that it will eventually cover their entire supplier base.
We’re a relatively small company in the industry – just 50 people – but we’re replacing competitors who are among the largest and most established companies in the sector. And we’ve done it by being entrepreneurial: our customers are looking for responsiveness, agility and outstanding service, so we’re trying to mirror that. Although we do some great marketing, we put much more money into making the product market-leading. That’s why in the last six months we’ve signed deals with the likes of Poundland, Hobbycraft, Screwfix and the Perfume Shop. And it’s a viral sell: you connect companies with suppliers, who themselves have customers and suppliers of their own. So it spreads out like a great spider’s web.
Because we’re a small company, everyone’s very hands-on. We’re very lean; whoever’s best equipped for the job will turn their hand to it. So I don’t spend all my time looking at M&A deals – I also spend some of it helping the team respond to RFPs; it keeps me close to the business. This week, for instance, I’ve been reviewing some presentations to customers. It’s all about going into detail, showing how we can help their business. Since there’s a high cost of sale every time you engage with a client, it makes sense to maximise your chances of winning. So we do dry runs, to make sure that when we’re showing the solution, it covers all the necessary angles.
We have a very close relationship with IBM, which takes up a lot of my time. We’re a small business, so customers may see that as a risk. We’ve tried to mitigate that by making a significant investment in IBM hosting our solution, which means that our disaster recovery and protection of customer data is absolutely best-in-class. We also work with IBM on generating business – the Sainsbury’s contract for example is very much in partnership with them. And on the back of this great win, we’re now thinking about which other retailers we can take this solution to, because we’re keen to continue or even exceed our current growth rate.
I’ve spent most of the rest of the week looking at a particular acquisition target. As well as the day-to-day organic growth, we’re also thinking about how we can grow more rapidly, to keep ahead of the slow-moving dinosaurs in the industry. The ‘1+1=3’ equation definitely applies, if you can find the right company to combine with. For example, North America’s a key part of our strategy going forward, and our likely approach there will through M&A. We’ve got a very entrepreneurial investment company called LMS Capital behind us; they’ve been with us since the start, and they’ve already invested about £20m in the business. In the medium term, they’ll be looking to make a return, either via an IPO or some other kind of exit – but for now they have funds to grow the business. The profile of the Sainsbury’s deal has actually resulted in a couple of people asking if we were interested in being acquired, but that’s absolutely not part of our strategy at the moment. We’re pretty sure we can significantly outpace the market.
It’s a tough economy, but we’re absolutely flat out at the moment. Getting out in front of customers is really the most important thing for the business. We provide a ‘Software as a Service’ solution, so the level of service you provide is critical – because every year customers can choose whether to turn the service off. You have to make sure you’re delivering the same or more value.
Bob Godfrey is CEO of Wesupply, a company that provides business-to-business integration and supply chain collaboration solutions for retailers and manufacturers.