Eugene-based software maker HighLevel has raised $60 million from private equity firm PeakEquity Partners.
The company has been bootstrapped since it was founded in 2018. It makes a software platform that is sold to agencies and marketing firms who then white-label it to sell to their small business customers. The platform helps with customer leads and acquisition, automated messaging and booking and other digital tools.
“We are turning agencies into SaaS companies,” said co-founder and CEO Shaun Clark. “They can white-label and resell the platform every month. They get all the revenue on those deals.”
There are some customers that do $6 million or $10 million in software revenue a year, Clark said. With HighLevel, agencies can be a one-stop shop of tools for small businesses without having to make the software themselves.
“What’s great is we can give them a meaningful business and we have a meaningful business,” he said, adding that it helps with his ultimate goal of helping small businesses get more customers.
Want more Portland startup news? Sign-up for The Beat delivered to your inbox twice weekly
HighLevel has a distributed team of 170. Clark is based in Eugene. Part of this capital will be used for hiring. The company’s only real office is in Dallas, Texas, but it has employees around the world. With these hiring plans Clark is immediately focused on bringing in management and executive talent that can help the young company scale further and navigate potential pitfalls.
He also expects to double the size of his engineering team.
This is the first outside capital HighLevel has taken. The entire process started when Clark was evaluating how to give equity grants and options to his employees. He hired investment bank Vista Point Advisors to help determine the company’s valuation.
Once that happened interest from PE investors came in. What set the PeakEquity deal apart was the firm’s commitment to what HighLevel was doing. The company has flat fees for its customers, so that means an agency reselling the platform to a handful of small businesses isn’t paying that much different than an agency reselling to dozens of customers.
That detail didn’t sit well with many PE firms, Clark said. But, PeakEquity understood what they were doing and that made the difference to Clark. The company even got a full buyout offer from a well capitalized source, but that buyer didn’t like the business model and seemed only interested in acquiring the customer base and “obliterating” what was built.
“I would have benefited more from the deal but it left employees and customers high and dry,” Clark said. “These people are the unsung heroes of business. (Agencies) are the engine behind any small business that has grown. To be a part of this and then just say, ‘see ya' I felt was wrong.”
Clark said the company doesn’t need the capital, but this infusion will allow the company to make some decisions quicker than it otherwise would have. He noted that a lot of the decisions that have driven success so far were delayed six to nine months because they were expensive.
HighLevel doesn’t release revenue figures, but Clark said the company grew substantially over the course of the pandemic as small businesses focused more resources on digital aspects of business. The company has more than 15,000 agency customers and a reach into more than 523,000 small businesses.
As part of this deal PeakEquity partners D.J. Andrzejewski, Brian Nejmeh and Jim Sheward are joining the HighLevel board of directors. PeakEquity took a minority stake in the company.
“HighLevel is a disruptive, product-led, growth company that has achieved scale and experienced broad product adoption in a very short period of time,” said Andrzejewski in a written statement. “We believe this transaction will enable HighLevel to continue to accelerate growth and drive further innovation for its customers.”
Through this entire process the company was able to figure out its initial goal of carving out equity for employees, Clark said. This year the company gave out meaningful cash bonuses and next year and moving forward it will have equity grants and options.
