Scaling a Leader in Software for Automating Corporate Accounting

Background

In 2013 the Silver Lake Sumeru team acquired BlackLine Systems, the most experienced provider of enterprise class subscription software designed to automate and control key aspects of corporate accounting. The investment team originally contacted BlackLine as part of a thematic sourcing effort focused on enterprise SaaS and prioritized the company due to strong customer references, large underpenetrated market opportunity and attractive fundamentals. After evaluating a number of potential partners, Founder Therese Tucker selected Silver Lake Sumeru due to our partnership approach with founders and success in scaling similar enterprise software companies. Therese continued as CEO while retaining a meaningful stake in the business and achieving partial liquidity for founders and employees.

Value Creation

Working closely with Therese and her team, we develop a detailed plan to accelerate growth and optimize the company’s subscription model through strategic initiatives in Sales, Marketing, Product, and Engineering. Key elements of this plan included:

  • Tripling sales capacity while maintaining a highly efficient selling modelto support strong growth
  • Building an installed base selling team and a mid-market sales team toincrease penetration of existing customers and target smaller accounts
  • Establishing strategic partnerships with ERP software vendors and implementation partners, including major accounting firms
  • Entering new international markets including Asia Pacific through directand indirect channels
  • Revising packaging and pricing to deliver increased customer value
  • Introducing new products in adjacent markets such as intercompany transactions
  • Enhancing the organization though key hires including a CFO, Chief Revenue Officer, Chief Marketing Officer, and Chief Technology Officer to support growth
  • Bringing on the former CFO of Salesforce.com (and SEP advisor) as a board member to help build a world class finance function and provide strategic advice

Results

BlackLine’s strong growth profile, high customer retention rates and market opportunity led to an IPO in October 2016 (NASDAQ: BL). Between SEP’s initial investment and the IPO, BlackLine’s revenues grew at nearly 50% CAGR while maintaining an attractive business model. Over the same time period headcount at BlackLine grew 3x as the team made substantial investments across all divisions. In 2016, BlackLine was named a Leader in Gartner’s Magic Quadrant for Financial Corporate Performance Management.

“Because of BlackLine’s strong leadership position in the market and impressive year-over-year growth, we had a choice of investment partners from a number of reputable firms. We selected Sumeru because we felt that their culture and values closely aligned with BlackLine’s. They understand how important our clients and employees are to our long-term goals. We are genuinely excited to leverage their expertise to help us grow.”

Therese Tucker, Founder and CEO