Founder of web-hosting company Miss Group talks about the road to exit with BGF
BGF announced its exit of high-growth, founder-led web-hosting company, Miss Group, in February 2020. One year on, we speak to CEO and founder, Mattias Kaneteg about his BGF journey and the ongoing success of the company.
Your growth journey
“We achieved significant growth during BGF’s investment as a minority equity partner. Revenue grew from £8 million to £25 million, with EBITDA increasing from £1.7 million to £11 million in the space of just two years. This was achieved through a combination of strong organic growth and an extremely ambitious buy and build strategy.
“With an initial £6.4 million investment from BGF in August 2018, followed by a further £13 million to accelerate our international expansion strategy the year after, we completed seven acquisitions across Scandinavia, Spain and the US. It was a highly successful, fast-growth strategy, resulting in an exceptional return on investment for all shareholders in a relatively short period, with an IRR of more than 100%.”
A buy and build growth strategy
“We are a buy and build company. To achieve the rate of growth that we have you need to have the right funding in place – that is key. Once BGF was onboard, we were able to utilise that funding to drive outstanding growth, adding additional complementary acquisitions to our group in geographies where we could see strong potential.”
What value can an investor add?
“BGF was more than just funding. Their strong network opened up new opportunities and helped to secure a more robust relationship with our banking partner, HSBC.
“The appointment of Phil Male as Non-Executive Chair also played a key part in the execution of our buy and build strategy. Phil has an excellent reputation in the industry, as former Chair of UK2 Group and Chief Strategy Officer at Cable & Wireless Worldwide. Having successfully built and exited multiple businesses in the technology sector himself, he was hugely influential in helping us to achieve our aims.
“One of the most important benefits of our partnership with BGF was the team – their network, experience and access to funding. They were amazing – each and every one of them – in helping us to get the right structure in place to take the next step in our growth journey.
“Through other business ventures, I’m lucky enough to still be working with BGF and hope that relationship continues. I love working with investment partners. For me, it’s the best way to run a buy and build company.”
How do you know when to exit?
“We were approached by a competitor in December 2019 which was looking to acquire Miss Group. As those conversations developed with our advisers, we decided that it wasn’t the right time for us as a business to sell to a trade buyer. However, there was an opportunity to kick off a bigger round of funding. That’s when we engaged with private equity investor, Perwyn, which took a majority stake in Miss Group.”
Where next? What’s your ultimate ambition?
“Since BGF’s exit, we’ve continued to play to our strengths in marketing our industry-leading proposition to SME customers, with a focus on Scandinavia, Spain and the US. With another four acquisitions under our belt last year, we have quickly reached €30 million EBITDA.
“Our aim is to take it to €100 million turnover and €50 million EBITDA and we will probably do that within the next one to two years. This will be achieved through our proven buy and build strategy, focusing on larger acquisitions that deliver higher and faster growth, as well as strong organic growth – essentially, selling more products to existing customers. In the market, we have the highest sales rate amongst our competitors, selling 6.5 products per company.”
What is it about running your business that gets you up in the morning?
“What’s really motivating is setting yourself a goal and really going for it. I love doing what I do; I’m an M&A guy at heart. I love doing deals and bringing more companies into the Miss Group family and could keep doing it for years. Ultimately, I want to create the best hosting company in the world and ensure that all our customers are getting a first-class service. After all, happy customers generate more customers.”
As a business leader, what keeps you awake at night?
“Fortunately, unlike a lot of businesses, we’ve not been adversely affected by the pandemic. Miss Group hosts around 950,000 websites worldwide. While it doesn’t keep me awake at night, having that number of customers and ensuring the service doesn’t go down is a huge responsibility. Thankfully, we have a great organisation and an amazing management team that has, on average, worked together for more than 10 years, so I know our customers are in great hands.”
What advice do you have for other business owners?
“I’ve made many mistakes with previous companies, but it’s all about how you learn from them. With Miss Group, I took all that experience and used it to create a highly successful, fast-growth business.
“For me, it’s all about the team – whether that’s an investment team or those within your business. When we started on our investment journey with BGF, it wasn’t about the money; it was all about the people. In M&A it’s about making quick decisions. If you don’t have the right team in place to go through those opportunities quickly, then the deal is lost. BGF played a vital part in making that process work.”
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