In a move that will come as a major rebuff to its doubters, Peppermint Technology has secured over £10m in funding from leading UK venture capital firm Scottish Equity Partners (SEP) and hired former BigHand and Tikit CFO Mike Kent and former Tikit non-executive director Neville Davis to its board.
The cloud-based legal and dispute management technology provider, which was launched in 2010 with the backing of OLM Systems, said the investment and hires would be used to accelerate its growth and strengthen its bid to become the dominant IT player within the sector.
OLM Systems will remain as a shareholder in Peppermint, which currently has more than 5,000 users across 30 legal and dispute management firms, including the likes of Blake Morgan, Penningtons Manches and Ombudsman Services.
In July this year, Kent and Sussex-based law firm ASB Law swapped out its LexisNexis Axxia system in favour of Peppermint. The month before saw wins from Cripps; Top 200 Salisbury-based law firm Wilsons Solicitors; and 102-lawyer Buckinghamshire practice B P Collins.
Peppermint has doubled its revenue in each of the last three years and now has 60 staff operating from its Nottingham base. However, it’s accounts filed this March for the year to 30 June 2014 – albeit abbreviated and unaudited given that it is a small company – showed that its debtors had increased from £365,278 to £1.8m over the past 12 months. Monies owed to OLM had risen from £3.3m in 2013 to £4.3m in 2014. SEE UPDATE AT FOOT OF ARTICLE
Said by Peppermint’s director and co-founder Arlene Adams to be the accounts you would expect to see in a software start-up company, the funding by SEP will nonetheless come as a surprise to those in the market who said Peppermint would find it difficult to secure investment and move forward in light of its debt and overall financial position. (See the comment from ‘Acctsman’ and ‘Viewpoint’ in our April 2015 article on Peppermint’s 2014 accounts.)
In addition to securing funding of over £10m, Peppermint has strengthened its board with the appointment of Davis as Chairman and Kent as CFO. Davis was the senior independent non-executive director at legal software supplier Tikit prior to its sale to BT and was previously CEO of Compel and Chair of Amor and Fourth. Kent was previously the CFO at both Tikit and legal digital dictation specialist BigHand.
Peppermint’s platform, based on the Microsoft Dynamics Platform, combines all the different software applications required by a legal and dispute management firm. The platform can share data across a sophisticated suite of built in collaboration tools allowing firms to transform the delivery of services and improve the efficiency of their back office operations.
Adams said: “We have grown rapidly over the past five years and are seeing increasing interest from legal and dispute management firms seeking an innovative industry platform. This funding will enable us to invest further in our product and our people to meet that demand. We are pleased to have secured SEP, with their significant experience of supporting high growth businesses, as investors and look forward to working with them to achieve Peppermint’s full potential as the dominant player in the legal and dispute management market.”
Gordon Beveridge, the SEP director who led the deal, said: “We have been very impressed with the achievements and growth of Peppermint to date. This investment, together with the appointments of Neville Davis and Mike Kent, will underpin the future growth of the business enabling it to continue to develop innovative, market-leading disruptive software.”
Grant Thornton advised Peppermint on the transaction.
UPDATE: We have attached a copy of the latest (2015) accounts from Peppermint. The headline figures area doubling of turnover from to £4.38 million from £2.1 million – an operating profit of £296k compared with a loss of £739k in 2014 – and an overall profit for the year of £323k compared with a loss of £221k the previous year. Here are the Peppermint Directors Report Financial Statement year ending 30 06 15