Unaric is a new firm with a brand, with ambitions for growth in the Salesforce sector. It is not another ISV but a company that is looking to buy up, initially, smaller ISVs, bringing them under a single brand that can provide delivery efficiencies and greater growth potential.
With the backing of a larger firm, Unaric intends to open up opportunities for larger enterprise customers that may not consider purchasing tools from smaller startups.
The firm was founded by CEO James Gasteen, Chairman Peter Lundholm, and CPO Neil Crawford. Enterprise Times spoke to Gasteen. The idea for a company that would bring together the long tail of smaller Salesforce ISVs was first mooted by Gasteen in a conversation with Lundholm after a mutual acquaintance introduced them.
James Gasteen, Co-Founder and CEO, said, “Unaric was started by founders for founders to help them release the value they have created. There is a mismatch in the Salesforce ISV ecosystem which we have experienced personally and we know how to put it right.
“We believe that by building suites of products that match more closely the needs of enterprises, we can help companies to significantly increase their sales, scale their businesses and sell to corporate buyers who would not normally buy from individual vendors.
“When software businesses become part of Unaric we can take all the admin off the founders’ plate and accelerate their growth channels, so that they can carry on building a great technical product.”
The majority of ISVs in the Saleforce ecosystem are small
There are an estimated 4,000 ISVs within the Salesforce ecosystem. 62% of them have an ARR of less than $5 million. The Salesforce ecosystem is also growing. It is estimated that it was worth $29bn in 2021 and will grow to $68 billion by 2026.
Unaric hopes that by consolidating point solutions, it can deliver revenue and profits for its investors and realise the ambitions of the various founders. It also hopes will join them on the journey. In acquiring these new businesses, Unaric hopes to retain at least one founder on the team to help drive the original inspiration forward without being hindered by the day-to-day running of the business.
I asked Gasteen what his vision for Unaric was. He replied, “To be the largest one-stop shop for Salesforce products within the Salesforce ecosystem.”
Peter Lindholm, co-founder and Chairnan, said, “We’ve put together a team of people who understand what it takes to scale a software company, and there is a strong opportunity for consolidation in this sector right now.
“Our mission is to help founders of ISVs take the next step – whether they intend to stay with the business they founded or whether they are looking for an exit. Unaric will build industry-focused suites of companies that innovate on product, drive scale and increase revenues.”
The funding
Unaric announced a $35 million seed funding round to finance acquisitions and its first acquisition, Salesbolt, which closed earlier this year. It intends to acquire 10-15 ISVs in the Salesforce ecosystems in the first year, and 30-40 within three years. It aims to acquire businesses worth between $0 and $100 million, differentiating it from PE and VC firms.
The seed funding is a mix of debt and equity led by LocalGlobe, with participation from Concentric, FJ labs and Atempo Growth. Several angel investors from the ecosystem also participated, including OwnBackup Founder Sam Gutmann, SaaS Guru Dave Kellogg and Hotjar Founder Johan Malmberg.
Julian Rowe, General Partner at LocalGlobe, said, “With highly successful, repeat entrepreneurs at the helm, Unaric is one of the most exciting businesses we have seen in the enterprise sector. Peter and James’s ambitious plan will create real value for enterprise customers, as well as unlocking strong new investment and commercial opportunities for the companies it acquires.
“The founding team have the perfect skills and experience to consolidate this sector, but also drive value across its portfolio of companies in highly tangible and impactful ways. We are hugely excited by the potential to better serve the enterprise sector with superior technical products that find a much bigger market.”
Considering the intent of acquiring 30-40 businesses over the next three years, $35 million seems a small amount to raise. Gasteen noted, “This is our initial funding out of the gates. The aspiration is to get 200 million with about 30 or so acquisitions. Investors typically are not going to give anybody that amount of funding upfront.
“It’s very much a case of here’s the funding. And then, obviously, as we develop the business, future funding will be available. This gets the ball rolling; it allows us to complete the next double-digit transactions, depending on their size, and then effectively, the investors will continue to support us.”
Is there a focus?
Unaric is based in the UK but has advisors such as David VanHeukelom (Founder and first CEO of Klient) in North America. I asked Gasteen what its initial focus would be. Gasteen replied that while the initial focus would be European-based companies, they would also look to build out the US team. Also, much of the ARR is likely from the US, where the founders have also had success growing other businesses.
Gasteen continued, “The way we think about cross-sell happens at the persona level. What we’re looking to do is to create clusters that drive cross-sell within certain key processes. These are largely horizontal to start with. So the three clusters we have at the moment are revenue operations, service and support and then what we call DevOps and System Administrators.”
Gasteen then intends to verticalize these within specific industries. The first sector is healthcare and life sciences, where three of the four RevOps organisations he intends to acquire, focus on that sector.
He continued, “We will have three products that address those pain points across the lead-to-close space for B2B device manufacturers. We will be able to use the experience of those customers and the founders within the portfolio to then develop a verticalized offering.”
Salesbolt closed in April, but what about those other acquisitions? Gasteen replied, “We’ve got two letters of intent closing in the coming weeks, and then we’ll have another three by Dreamforce.”
Gasteen compares Unaric to firms like Veeva Systems ($31bn market cap), Ncino ($3bn market cap) and also Constellation Software ($43bn market cap). The intent is to create a 10x cross-sell opportunity business by bringing related companies together.
While Unaric will also create a centralised finance, HR and operations team, the intent is to provide a Salesforce centre of excellence that will provide both development and architecture support. That team will be led by CPO Neil Crawford and supported by James Melville, Head of Architecture, previously a Salesforce architect at Accenture, SalesTrip and Aforza.
How would that centralised engineering team operate?
Gasteen answered, “The idea is we would have (strategic) roadmap direction expertise, best practice at HQ level, and that the actual engineers, who built the product, stay at the company level.”
There are risks and challenges, but until the acquisitions are under the Unaric brand, it will be difficult to identify how well the different applications work together or, more particularly, overlap.
Gasteen has a clear view of how the applications will work together within Salesforce. He commented, “What you want to end up doing is having a thin interoperability layer that you can instal on a customer’s cloud org. Then each subsequent app has a pre-configured set of rules for how it interacts with the generic suite. That’s how we think about the technical integration from an architecture perspective.”
Acquisition number 1 – Salesbolt
The deal to acquire Salesbolt was completed in April. Founder and CEO Craig Maxwell is staying with the company as it becomes the first in a long line of acquisitions. Salesbolt addresses the challenge that fast-paced businesses face of customers’ contacts changing roles, on average, every 36 months. It automates CRM contact updates to help build and maintain pipelines and prevent churn.
The company has over 1,2000 customers, including Verizon Connect, LogicMonitor and Horizon Recruitment. It offers a free Chrome extension with limited usage, and then increasing functionality with Pro and Salesbolt Enrich plans.
Curt Hopmann, CEO of Breadwinner, commented, “Salesbolt’s intent data gives our revenue team a flood of high quality, hyper-targeted accounts that care about our solution before we ever reach out.”
As it acquires these new businesses, will Unaric look to change brands?
Gasteen answered, “On the branding side, what we’ll look to do in the short term, is have Salesbolt, a Unaric company. Then, as we build out the portfolios, we will brand the portfolio so that the customers can understand where the cohesion lies. Customers in life sciences wouldn’t care about telco, for example. We want to create brands that are meaningful for end customers to support cross-sell and that customer experience.
Enterprise Times: What does this mean
In some ways, it is surprising that other companies have not looked to try this approach. Unaric is a company that is well worth watching. It appears to have its first suite of solutions already realised, and once the dust has settled on the acquisitions, it should be clear whether the cross-selling opportunities exist and whether it can realise 10x growth.
If proven, it will be interesting to see whether any other venture capital firms decide the opportunity is too good to miss, create their own acquisition vehicle, or invest in Unaric. Unaric has been working in stealth for some time, though. It would be surprising if it does not have a list of acquisitions lined up into 2024 with a clear direction and focus for growth.
