Nomos One contemplates bright future after upscale acquisition.
A Dunedin startup which quietly went about becoming a world leader in subscription-based lease management software has been bought by US tech investor EXA Capital.
Nomos One, which has 40 staff, mainly in Dunedin and Christchurch with some in Australia, closed the deal with EXA Capital earlier this month.
Almost 300 customers in 15 countries use Nomos One to manage their lease portfolios, including Spark, Genesis, Mitre 10, MetService, and Canada’s largest rural Wi-Fi provider, Xplore.
Dunedin businessman Jonny Mirkin founded the company in 2011 to help lawyers track commercial leases for their clients. The product launched a year later with two staff and six customers.
After steady growth, Nomos One catapulted to new heights when it moved early to integrate the then-new IFRS 16 accounting standard into its lease accounting module. As the need for IFRS 16-compliance rolled out across the world, Nomos One expanded its cloud-based service to capture the global market.
The company, whose profitability was a key enabler in the sales process, now has three revenue streams – subscription-based software as a service (SaaS), an onboarding service which is taken up by most customers and includes a full audit of their leasing data, and a newer managed services division.
With an eye on the future, three years ago the board appointed CEO Andrew Paykel to accelerate growth and look for merger and acquisition (M&A) opportunities. There had been a number of approaches from private equity and strategics attracted to Nomos One’s SaaS credentials, three-year contracts and less than 0.5 per cent customer churn.
Working with Sydney-based M&A advisers Aequo Partners, Paykel and the executive team began a formal search last November. As a global leader in the vertical lease management space, it immediately caught the eye of EXA Capital, along with other US, UK, South African and Australian investors.
Founded in 2020, Texas-based EXA Capital specialises in buying and scaling up enterprise software businesses and runs a long-term buy-and-hold-forever strategy. It describes itself as not a private equity, venture capital or large software conglomerate – but as investing in companies indefinitely to give founders and management freedom of autonomy while providing guidance and support to scale the business.
“What we liked about them was that they are a build-and-hold acquirer,” says Paykel. “We wanted to continue the brand and the legacy of the company as we grew, aligned around what we could do with the business, how we could expand overseas and what was best for our people.”
EXA Capital also provides centralised management infrastructure to its portfolio companies which Nomos One can use to tap into product development, lead generation and marketing support as well as finance and HR.
“There are a lot of synergies and resources there that we need to grow. I guess that’s their secret sauce,” says Paykel.
Following a final due diligence trip to Dunedin by the EXA team in April, Nomos One became the seventh company in its portfolio and its first Kiwi acquisition. The acquisition, which saw Nomos One’s mostly private 53 investors roll out, will support the global launch of its new Amazon Web Services-based platform, OneLease
OneLease, which took three years to develop, will seamlessly integrate Nomos One with its customers’ business dashboards and ERP (enterprise resource planning) systems to access leasing and financial data. Paykel says it is more scalable, customisable, automated and as an operating platform is highly secure – a business-critical software product to account for all agreements, contracts and lease portfolios.
“We don’t necessarily want to take on many more countries,” says Paykel. “It’s more about going deeper into those countries and expanding our footprint through EXA’s resources and capabilities. We believe they’re the perfect partner to do that.”
Customers range from SMEs to enterprises with portfolios of all types of assets across a wide range of industries including manufacturing, retail, mining, education, healthcare and aviation.
“There wouldn’t be too many businesses that don’t have a lease portfolio of some description. We offer a single source of truth where they can store their agreements and documents in an automated manner that supports their business planning and gives accuracy over those live documents which they didn’t have previously.”
The company has built a strong reputation, particularly through the big four advisory firms. Nomos One worked with them in the early days to build its first accounting engine.
Despite being poised to accelerate revenue growth worldwide, Nomos One will remain headquartered in Dunedin, says Paykel, who is based in the UK which, along with South Africa and the greater African continent, are growth markets.
“We were a profitable business and continue to be under Exa. That’s important because a number of tech companies can drive top line but aren’t necessarily profitable. We’re very conscious of being a sustainable business and have been for some time.”
He says low customer churn is key and Nomos One will continue to be customer-centric with its product and design and New Zealand-based customer care and onboarding team.
For more information: nomosone.com