Building a Market Leader in the Online Services Industry
Founded in 1997, The Endurance International Group (“Endurance”) is a founder-run provider of online solutions to small and medium-sized businesses. At the time of Accel-KKR’s investment, the company was the fourth largest provider of website creating, hosting and management solutions in the world with over 600,000 subscribers and ranked among the top ten for domain names under management worldwide. Over the first three years of our investment, we grew revenue over 4x and increased the number of subscribers to ~2 million.
Accel-KKR first met Endurance five years before investing in the company. Accel-KKR believed Endurance had a strong team and one of the best technology platforms in the industry, but the company lacked sufficient scale to be a platform investment. As a result, Accel-KKR continued to monitor the business and its progress. In October 2008, Accel-KKR led a recapitalization of Endurance. The transaction provided liquidity to existing investors, and Accel-KKR committed to continue to provide capital to fund both organic and inorganic growth.
Immediately after the investment, Accel-KKR and the management team worked together to implement a strategic plan that ultimately included the following key actions:
- Executing nine add-on acquisitions
- Launching an aggressive organic growth initiative
- Implementing processes to segment the customer base and drive targeted marketing campaigns
- Optimizing Endurance’s capital structure
- Expanding the company’s management team
- Expanding international operations
Importantly, the strategic plan focused on profitable growth. As a result, Endurance grew revenue over 4x in the first three years of Accel-KKR’s investment and its cash flows increased over 6x during the same three-year period. In December 2011, Endurance was acquired by a consortium of investors for approximately $1 billion.
This and other featured case studies represent a subset of Accel-KKR’s portfolio companies. These case studies are selected as examples of software and technology enabled services companies, often founder owned, that desired a partner with a growth orientation (both organic and inorganic) and capital base to execute on targeted value creation opportunities. The results attributable to these companies may not be indicative of results of all portfolio companies with which Accel-KKR has arrangements. There can be no assurance that comparable results will be achieved in other and future investments.