Enterprise software provider Plex Systems, Inc. is doing a little resource planning of its own, thanks to a $6 million cash infusion, announced this week.
Apax Partners, a global private equity firm that has invested in the software-as-a-service (SaaS) ERP vendor since 2006, put up $5 million, while Plex management and the company’s founding investors kicked in the other $1 million.
Since the recession took hold late last year, manufacturing capital has often been in short supply. Asked how Plex was able to buck the trend, President and CEO Mark Symonds told Managing Automation, “Unlike trying to get an outsider to believe, our existing investors have seen us execute throughout the Great Recession and grow the business and maintain cash. They agreed with me that we are poised for faster growth and it’s time to start stoking the fires.”
“We have backed Plex Systems since 2006 and are pleased to be supporting the company’s management team as it oversees the next phase of growth,” said Jason Wright of Apax Partners, in a prepared statement.
Plex plans to use the newfound money to increase its sales and marketing efforts, especially in the life sciences and food & beverage industries, where the company has said it would look to expand its business. In addition, Plex will continue to push ahead in its bread-and-butter automotive and aerospace/defense markets, Symonds said.
“Our biggest problem is name recognition,” he acknowledged. To remedy that, the company will put resources into lead generation programs, white papers, social networking, and building out its community. And Plex will add eight sales reps, in the Southwest, the South, Chicago, and Northern California, he said. The company also will invest in implementation partnerships with consulting and accounting firms that work with manufacturing companies.
“Our thinking is to grow smartly and rapidly. In two to three years, an IPO starts to make a lot of sense,” Symonds said.
The company’s “sweet spot” is mid-sized manufacturers, which Symonds characterized as $100 million-to-$1 billion companies, although “we’re getting more and more at bats in $2 billion companies,” he said.
“We’re still small, but our growth rate is accelerating,” he said. Plex claims top-line growth in 2009 of 15% to 20%. The recession has accelerated the move to SaaS, Symonds explained, noting that his company has been offering that model for 10 years.
Next year, Symonds is looking for 30% revenue growth. Plex is seeing “a rapid replacement cycle starting up” among companies that haven’t invested in new software since the run-up to the year 2000 (Y2K) changeover. Also, Plex’s target segments of food & beverages and life sciences are turning to new ERP tools to automate processes in order to meet increasing regulatory demands, he said.