Technology · Realised
Digital Lifecycle Group
IT cost consulting and software buy-and-build.
At a glance
Sector
Technology
Invested
March 2018
Realised
May 2024
Status
Exited
Acquired by
Teleresult
Background.
- An IT management consulting firm specialising in IT cost reduction.
- The business had a strong record with blue-chip customers. In the five years before our investment it had provided consulting services to sixty-seven per cent of the ASX 100.
- Shortly after we invested, it acquired ClearCost, an enterprise software platform for managing IT cost, broadening the service offering.
Our investment thesis.
- Total expenditure on IT services was growing rapidly, and with it the importance to enterprise customers of managing that expenditure.
- A strong track record with top-tier customers, and a business well positioned to lead an emerging category.
- Combining consulting with a software platform would improve efficiency and make the customer base stickier.
Our results.
- During the pandemic, customers cut spending on external consultants. The business emerged weaker, having lost many senior consultants and a number of long-standing clients.
- That left an elevated level of customer concentration, and when the largest customer went through a restructuring event the business became financially challenged.
- At the same time the founder and chief executive, who drove sales, stepped down for serious health reasons, which hindered the ability to rebuild.
- The business was sold to Teleresult.
Past performance is not a reliable indicator of future performance, and figures drawn from individual deals executed on a deal-by-deal basis are not representative of a pooled fund. Wholesale investors can request the full record.
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