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OB10 #8 – Ready to be acquired!


According to VentureCast, a production of Library House, one of the most accessed companies recently is none other than OB10. The company profile from VenturePedia (another production of Library House) can be downloaded for £50 from here. As you know company’s current financial backers include Cargill Ventures, Fleming Family & Partners and Lynx Capital Ventures.

One of the key reasons for increased interest by predators is the recent announcements by OB10. Among these are the press releases about teaming up with GXS and Abbey/Santander. At least, I met one predator (I know he will dislike the use of this term – and he is really a nice guy) who is talking to OB10 and others in this space.

As far as I know, the last round of funding was completed in Q4 06 (press release on 24/10/2006). The additional capital raised at that time was $13.6 (£7.3) million from FF&P Private Equity, the private equity division of Fleming Family & Partners, which was one of OB10’s major existing investors and became the Company’s largest individual shareholder after this round of investment. The funding was mainly for geographical expansion and ongoing development of range of products and services. At the time Jamie Gunn, CEO of OB10 stated:

 “The fact that a group as illustrious as FF&P should choose to underpin our growth in such a substantial way is a great compliment to OB10 as a company. With the support of our investors, we have delivered exactly what we set out to do over the last 18 months. That includes the continued expansion of our sales force and channel in the face of sustained market demand, and the consistent performance of our sales teams in all territories.”

So 10 months after the announcement, have they delivered? On profitability, perhaps not. On revenues, improving. On sales force expansion, yes – understood to employ over 60 sales/support personal, which is seen as a key differentiator by number of OB10’s partners. Most of them being native language speakers, this diverse sales/support personal gives the ability to deploy OB10 network across multiple supplier bases simultaneously for large corporate clients. In fact, OB10 now gives guarantees for meeting supplier enrollment targets. I am not aware of anyone else who does the same. This has been a key reason for winning some of the most recent large contracts.

In the same press release, David Donnelly, CEO of FF&P Private Equity stated:

“e-Invoicing certainly offers an attractive business proposition, since it enables companies to cut the cost of handling invoices, while also improving their on-time payments and providing much greater control over cash flow. After seeing the OB10 network continue to grow in both membership and transaction volume following our earlier rounds of investment, we feel confident that additional funding at this stage will support even greater growth”.

OB10 Chairman David Newlands, who invested substantially again at the time stated:

“Without a doubt, this latest investment is a direct result of OB10’s recent successes and progress since its last round of funding. The confidence that existing investors have in the company will not only enable OB10 to develop its business even further, but also negates the need for OB10 to tap into external markets, as the company’s investor base boasts an incredible strength and breadth of its own.”

OB10 is no doubt one of the most interesting EIPP service providers based in the UK. They have achieved significant competitive advantage due to high investment and some of the well respected financial backers in the industry. Their continuing trust on the company at a time of continuing losses is vital for the survival and continual growth of OB10. OB10 is gambling on the fact that through sheer global presence and targeting larger buyers with improving supplier roll out times, they can win at the end and be profitable. The signs are positive. Though it is hard to see how long OB10 will remain independent, given the recent acquisitions of Harbor Payments and Xign by financial institutions. Holding on for the highest possible valuation at this point seem to be the best option.



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