A year after the release of the fifth and final phase of its NextGen platform, Carmel-based financial software firm Baker Hill is experiencing significant growth.
And Baker Hill CEO John M. Deignan thinks that could accelerate to double-digit percentage revenue growth for several years, given that the major push to lure new clients with the recently released platform is just beginning.
While Baker Hill doesn’t divulge its annual revenue, Deignan confirmed the 200-plus-employee company—130 of which are located in central Indiana—has an eight-figure revenue stream, adding “it’s closer to $50 million than $10 million.”
“Double-digit growth for us is very meaningful,” Deignan told IBJ. “We are confident NextGen will drive double-digit [annual] growth well into the future.”
Launched in January 2017, Baker Hill’s NextGen is a cloud-based loan-origination, risk-management and analytics solution and is designed to meet the needs of financial institutions in a single platform.
Key to the software, Deignan said, is that it works on commercial and small business loans as well as consumer lending. Deignan said there’s nothing quite like NextGen in the market and added that it won’t easily be replicated.
It took two years to develop NextGen, he said, and Baker Hill invested $20 million to bring it to market.
Baker Hill has more than 100 clients transitioned to NextGen and company officials plan to have its entire client base transitioned by the end of next year.
It’s a difficult proposition to get any company to change its software platform. Financial institutions—and other companies—often sign three- to five-year agreements with software vendors. In addition to waiting out contracts, there are also significant logistical concerns to switching platforms.
But Deignan said the advantages of NextGen are significant enough for companies to make a change. Industry experts said NextGen can do the job of three to six software packages and technical tools.
“We think this is a very, very significant improvement over what’s in the market today,” Deignan said. “It’s an exhaustive, very rich platform.”
Deignan said it’s difficult to project how many new clients NextGen will score for Baker Hill, but added that there’s “very strong interest” among financial institutions.
“We expect strong growth in new clients in 2019 and 2020,” Deignan said.
NextGen has already helped Baker Hill attract some sizable new clients.
This month, Baker Hill signed a deal with Wisconsin-based CAP Services, a not-for-profit offering small business assistance and financial support to low-income individuals. CAP, which has two dozen programs in multiple counties, will use NextGen to provide underwriters and credit analysts the reporting options they need to make sound credit decisions.
Last year, Baker Hill signed a deal with Tennessee-based Built Technologies. As part of the deal, Built is recommending Baker Hill’s NextGen to its list of clients. Many within the tech sector credit Built Technologies with bringing construction lending into the digital age and say the company’s client base is expanding rapidly.
Baker Hill—one of the area’s oldest tech companies—was founded in 1983 by husband-and-wife entrepreneurial team Mark and Karen Hill and then sold to global financial information services provider Experian in 2005. In 2015, Experian sold Baker Hill to Riverside Co., a New York City-based private equity firm, for $100 million.
Since Experian sold Baker Hill, the Carmel-based operation has ramped up research and development and is in growth mode.