Ethos Technology, the division of private equity leader Ethos Private Equity, focusing on technology investments, is extremely pleased with the performance of one of its earliest investments, local e-business software house Tilos Business Solutions.
Ethos Technology initially invested in Tilos last year to fund the company`s expansion, says CEO Claudia Koch: "In the 14 months since we invested, the company has performed remarkably well and ahead of expectations. They`ve now doubled revenues and are running at a profit."
Ethos is one of the most cautious fund managers in the market, and chooses its investments with supreme care, discretion and diligence. This approach has paid off handsomely, and resulted in one of the best investment track records in the country.
One of the aspects that attracted Ethos to Tilos, says Koch, was its clear differentiation.
"We performed an extensive due diligence on Tilos, covering not only the financial aspects of the business but the calibre of its management, its technology offering and its competitive positioning in the global smart enterprise suite (SES) market. We found only one other player in this field with a full suite offering similar to Tilos.
"Our interpretation of Tilos` global positioning has been confirmed in our observation of increasing international interest by large technology product companies to acquire Tilos` rich functionality offering. During our first year as shareholders in Tilos, the company secured 27 new projects and close to doubled its staff and turnover. It also made major inroads into penetrating international markets with tremendous growth potential still to be realised, particularly in Europe."
In line with Ethos Technology`s approach, Koch sits on the board of Tilos in her role as chairman, and is directly involved with management in a number of key business building activities in areas such as governance and strategy formulation, along with two of her Ethos Technology colleagues, Stuart Mackenzie and Colin Vallis, who also serve on the board of Tilos.
"Tilos` current and future success is tied to its business model," she says.
"The business is eminently scalable, as Tilos is a product-centric business and draws on partners, locally and internationally, for domain skills, sales and implementation. "This approach is paying off, with Tilos on the brink of closing a number of major international deals, specifically in the burgeoning Russian financial services market sector."
The take-up of Tilos` SES offering has been rapid with large, corporate clients as it enables significant competitive advantage, adds Koch. "Tilos` SES approach delivers on the requirements of even the largest companies as it is implemented quickly; closely aligned with client strategy and needs; and well under budget especially when compared to international alternative offerings. These are three of the factors that enable companies to move ahead of their competitors.
"Finally, the quality of management at Tilos, spearheaded by Victoria Vaksman and Sybille McCloghrie, has allowed the company to build a uniquely differentiated vision, and then to fulfil this vision," concludes Koch.
"Our partnership with Ethos has been fundamental to our success," says Tilos director McCloghrie. "It is no secret that many investors have burnt their fingers in the ICT sector; or that ICT companies have failed to leverage their value through attracting the wrong investment partner. Ethos` extraordinary care, diligence and commitment, allied to their strategic insight, ensured that we avoided these errors and we are set for a very bright future."
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