Vivi is a Melbourne-based tech company that provides wireless screen mirroring and digital signage solutions for the modern classroom. Their technology is used in over 40,000 classrooms globally and drives improved learning experiences, increased student engagement, and a reduction in IT help desk support tickets.
Here’s how they were able to grow their market share by funding international market expansion with the help of Riverside Acceleration Capital’s non-dilutive capital and hands-on guidance.
Expanding into the United States
We first met Vivi in 2019 after an introduction made by Riverside’s Australian office. At the time, Vivi was exploring their options around a potential private equity buyout but realized that they were still a little early and could benefit from being able to prove additional scale and the ability to expand their proven business model into new markets – namely, the US.
It was clear from the first conversation that we could provide not only the funding needed to finance this expansion, but also the support, expertise, and partnership needed to navigate the US market.
We invested $1 million (a) in non-dilutive, revenue-based financing, (b) which enabled Vivi to expand their US-based team without diluting their ownership stake ahead of a potential future exit.
Over the next year, our team of Growth Advisors (c) worked closely with Vivi’s team to design and execute on an expansion strategy. Without taking control or a seat on the board, we were able to tap into decades of B2B SaaS operating experience to offer key insights on everything from structuring a US-based sales team to adapting pricing to a new market.
Today, Vivi has established a strong foothold in the US education market and has grown their US-based office to a team of 18. They are expected to grow revenue by over 50% in 2021.
Funding for the ‘inflection points’
Across our portfolio, market expansion is one of the most common uses for our funding. Whether it’s to launch into new geographies like Vivi or to move upstream like Consensus, (d) many of our portfolio companies are looking for financing to accelerate through ‘inflection points.’ These points often require a ramp-up period for testing, launching, and growing into new markets but have the potential to make a significant impact on a company’s bottom line down the road.
Revenue-based financing enables companies to resource these growth opportunities without drawing funds from core business activities and without triggering a new valuation event before the new expansion strategy is proven.
Additionally, RBF reduces the pressure of immediate returns that often come with venture capital and provides the downside protection to cover the time it takes to start generating revenue from a new market opportunity. Repayments ebb and flow with monthly revenue, meaning it’s closely aligned to the natural business cycle and frees up more of a company’s cash flows for reinvestment in growth initiatives during these inflection points.
Then, once an entrepreneur has passed the inflection and proven this new strategy, they tend to be a much better fit for an acquisition or larger venture capital round – and can go into a negotiation with much better metrics.
Case study should not be relied upon for investment decision making and should not be considered an offer or solicitation of securities or investment services. For informational purposes only and intended for General Partners or Management teams considering partnering with The Riverside Company. Portfolio company selected based on non-performance criteria
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