Beaverton software maker Exterro has acquired e-discovery software business Zapproved in a move that brings two complementary businesses together.
Terms of the deal were not disclosed, however, Exterro’s main investor Leeds Equity Partners and Zapproved’s investors K1 Management and Vista Equity Partners will all have stakes in the newly combined company.
The two companies have complementary offerings. Exterro has a platform aimed legal governance, risk and compliance, and Zapproved has a platform for e-discovery used by more than 350 corporate legal teams.
The founders of each company, Bobby Balachandran of Exterro and Monica Enand of Zapproved, have known each other for more than a decade, said Enand. And they were frequent sounding boards for each other.
“We have innovated in different ways,” said Enand, and this deal brings those together. “They have the product portfolio, and we have innovated with how we work with customers, our customer success engine and how we interact with the market and the community.”
Zapproved wasn’t planning to sell or raising money. However, Enand and Balachandran have been looking for an opportunity to collaborate for years, she said. The timing was right to do a deal now.
The combination means a single platform that can help customers with the complexity of privacy, e-discovery for litigation and other legal operations, digital investigations, cybersecurity response and information governance.
“I have known Monica Enand, president and CEO of Zapproved, since the early days of both of our companies' origins in Portland,” said Balachandran in a written statement. “Since inception, we have shared a common vision for providing market-leading software and support for our clients and partners, and the combination of Exterro and Zapproved will continue that vision by delivering enhanced value to our constituents.”
Zapproved’s team of 130 is expected to move over to the new company, said Enand. She noted that the integration process is now underway with the deal closed. Enand is also continuing, although her title has not been determined.
“The management teams are all hands on deck to figure out how to make this smooth for everyone involved,” said Enand. “Bobby and I both want the same thing.”
Zapproved has become a convener both in the Portland tech community hosting events in its space as well as in the legal community with its annual Prex Ediscovery Conference. Enand expects that to continue in some form.
“Cultures evolve and shift. But there is commitment to the strengths of Zapproved and making them a part of the new company,” said Enand. “I wouldn’t have done this if that wasn’t a part of it.”
Enand added she is grateful and immensely proud of what the team has built at Zapproved and who she was able to build it with.
“I feel proud of what we accomplished. One of the early conversations Chris Bright (co-founder of Zapproved) and I had was we wanted to build a business and be successful and be good people the whole way through,” she said. “I feel like we have done that.”
Hasan Askari, managing partner at Zapproved investor K1, noted that the Enand and the Zapproved team had a lot to be proud of.
“It is not easy for anyone to build a successful business, but it is especially impressive for Monica to overcome hurdles unique to women from immigrant families. I’m lucky to call her my friend and business partner,” said Askari in a written statement. “As many Zapprovians know, this wasn’t just another investment for us and it’s emotional to have reached this milestone. I look forward to seeing the Zapproved-Exterro combination continue to build on the foundation we built together.”
In Exterro, Zapproved joins a company of 600 global employees with several offices outside Oregon. Last year, the company recapitalized at a more than $1 billion valuation. At the time, executives noted it has more than quadrupled revenue since 2018 and has more than 3,000 customers worldwide including Boeing, United Healthcare and Oracle.
