ExactTarget Inc. fetched $2.5 billion in July after 12-1/2 years in business and barely a year on the stock market.
The deal left a resounding question for the city’s budding technology industry: Who’s next?
Reaching the publicly traded level might not happen for anyone in the next year or two, according to executives and investors. But Indianapolis has several companies that have hoisted themselves out of the often-shaky startup phases and are ready to take off. They just haven’t reached the heights of a major enterprise ready to go public.
IBJ profiles here five of the most promising prospects, based on a range of factors including job growth, outside investments and accolades.
The companies sell a computer network in a box, software that helps train nurses, devices that power charity auctions, customer software for medical labs, and sales proposal software.
Initial public offerings or nine-figure buyouts aren’t likely imminent.
“It’s unreasonable to expect every year to have a big IPO,” said Don Aquilano, managing director of investment firm Allos Ventures. “Those companies are more than a decade in the making—a 15-year overnight success.”
But the firms below are finding success in their niches, giving owners and investors hope of big things to come.
Scale Computing
Jeff Ready started and sold two companies in Silicon Valley before he moved home to Indiana in 2006.
After returning, he had a thought: Maybe he could try the same thing here.
Ready and his business partners, Scott Loughmiller and Jason Collier, had an idea based on a problem they encountered with their previous businesses, advertising software firm Radiate and spam blocker Corvigo.
Midsize companies struggled to find computer servers, storage devices and virtual hardware elaborate enough to fit the businesses’ needs, but not too complex or expensive.
“They’re using low-end [equipment] because it’s cheaper,” said Ready, 39. “Or they have to learn the complexities of big-enterprise software, even though they don’t need all those things.”
Shoving entire computer systems onto a cloud network doesn’t always work because of security and costs with pay-as-you-go models.
That’s where the men came up with the idea for Scale Computing and its “data center in a box.” The device—about the size of a piece of checked luggage—handles a company’s network needs for a single, upfront payment that starts at $25,500.
Forbes reported the company had $5 million in revenue in 2010, when the magazine in 2011 deemed Scale one of the nation’s “Most Promising Companies.” Announcements since then have routinely referred to “record” quarterly results, but the company is silent on actual numbers.
Scale, which launched in 2007, landed $43 million in outside funding from 2009 to 2012. That puts the firm behind only ExactTarget ($214.9 million) and Angie’s List ($53.6 million) in the state of Indiana, according to IBJ data.
Stephen Hourigan, CEO of Scale investor Elevate Ventures, said the company has “disrupted” major competitors, such as cloud network provider Amazon Web Services Inc.
Scale is able to keep its prices lower than its larger competitors that run cloud data centers, which typically charge monthly subscriptions. For a midsize business, that can run thousands of dollars each month.
Orbis Education
Twenty years working for Roche Diagnostics and medical supplier CCS Medical meant Daniel Briggs kept a close eye on the health care providers who were his customers.
He quickly picked up on a growing demand for nurses.
In 2007, he and two silent partners launched Orbis Education. The company develops software that nursing schools use to train their students. It lets them update their curriculums quicker as they try to get more nurses into the profession to keep up with the growing need.
“It’s not just about the technology and the software,” Briggs said. “It was, ‘How can we help hospitals and universities address a growing concern?’”
More than 1,000 students at Marian University in Indianapolis, Northeastern University in Boston, and Roseman University of Health Sciences in Henderson, Nev., among other schools, have used the software.
“Each school has its own, unique curriculum and the technology allows them to do it quicker,” said Briggs, 53.
Investors have put their faith in Orbis as it grows in a $4 billion-per-year health-care-education market.
In 2012, Orbis collected Indiana’s largest private investment round, worth $24.3 million. The company also secured $8 million in 2010.
Briggs would not discuss revenue, but the company expects sales to double annually over the next several years.
Locally, the firm has grown to about 60 employees who work in an office in Carmel along North Meridian Street. Nearly 100 more employees are scattered among the six states where Orbis operates.
BidPal
When you run a publicly traded company that eventually sells for $200 million, you get a lot of invitations to charity events.
Scott Webber knows. He ran Software Artistry, the city’s first publicly traded software firm, before IBM bought it in 1997.
Rising to executive ranks at the software firm meant he spent much of his free time attending charity auctions. His wife organized several of them.
What he witnessed was a chaotic process in which attendees would hover around bid slips and wait to outdo others—or flat-out elbow people out of their way.
That’s why Webber, when presented with a chance to invest in BidPal, considered it and took the plunge. He’s now the company’s chairman and CEO.
“Lo and behold, I find that every year, plus or minus $300 billion is raised by these organizations,” said Webber, 60.
BidPal develops software used for bidding in charitable auctions. The program loads onto either smartphones or onto iPod Touches that the company provides to not-for-profits. The company boasts it can raise auctions’ revenue an average of 40 percent—and often higher.
The firm, founded in 2007 by Harris Turner, was the fastest-growing business in Indiana last year, according to Inc. magazine. Its revenue shot to $10.2 million from $231,000 in 2009.
Webber’s experience, combined with that of the rest of his management team, lured investors to a firm that claims little competition in a massive market, said Aquilano, of Allos Ventures, a BidPal investor.
“With the advent of cellular, there’s been a handful of young companies that have come up and sort of compete on the mobile bidding at a silent auction,” he said. “But if you take the top four players to come out of the woodworks, all their revenues combined are smaller than what BidPal was.”
Hc1
Doctors and technicians in medical labs have no trouble plying their craft. But managing documents and communication with customers can get a bit messy, a problem entrepreneur Brad Bostic set out to solve.
“The final catalyst for it was, a friend in private equity acquired a lab,” said Bostic, 38. “It confirmed the issue with a lack of relationship management was real prevalent.”
Bostic, a co-founder of ChaCha Search Inc. in Carmel, began operating Bostech Corp. in 1997 in Zionsville. The company incubated hc1.com Inc. and eventually launched it as a standalone business in 2011 and moved its headquarters to northern Indianapolis.
Hc1’s software provides a dashboard setup to manage medical documents, bills and other records for labs, radiology clinics and, Bostic hopes, entire hospital systems someday. The program also yields data for customers to use, such as information on physicians’ productivity.
The firm has quietly raised $14 million in investments. It most recently announced in May it had secured $3 million as it seeks to more than double its $10 million per year in sales by 2014, Bostic said.
About 70 people work for the company, which plans to add another 50 employees in the next year.
There are 215,000 certified labs in the United States alone, giving hc1 an estimated addressable software market in the $6.5 billion range. The company has signed up more than 500 facilities so far for its monthly subscription-based service.
Aging baby boomers and looming overhauls to health care will quickly boost hc1’s sales over the next few years, Bostic predicted.
“I’d say once you get into the mid-to-late 2014 time frame, we start having more of an international scope of operations,” he said.
TinderBox
Dustin Sapp, Kristian Andersen and Mike Fitzgerald have all run their own businesses.
They also all noticed a nagging problem that hurt their companies: Preparing sales presentations gets to be a chaotic process, making it harder to close the deal.
The trio formed TinderBox in 2010 to fix the problem.
It is easy to lose a lot of data and documents while assembling a pitch, said Sapp, 34, who previously ran voice message service Vontoo Inc. and sales software firm NoInk Communications LLC.
“When you have larger sales teams, it makes it incredibly inefficient. … It’s just a mess,” he said.
TinderBox’s software aims to make the sales process quicker and more effective.
Companies as large as Angie’s List and Gannett have signed up.
About 30 people work for the firm today.
The company has grown enough that its quarters next to The Speak Easy in Broad Ripple became cramped. So it moved in August to a swankier suite over Monument Circle, where it will have elbow room to hire more people.
The Indiana Economic Development Corp. committed in March to $1.4 million in tax credits for TinderBox and another $55,000 in training grants under the promise the 3-year-old firm follows through on a $540,000 investment and hires 95 people.
Sapp would not reveal TinderBox’s revenue, but it is on track to triple next year.
“We don’t have any intention of letting up on the gas over the next couple of years,” he said.•
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