Recently, the sale of the Frankfurt-based legal tech company BusyLamp, one of the pioneers in legal spend, e-billing and matter management, was announced. The acquirer is the US company Onit, Inc. from Houston, an international competitor. Onit has been on a strong growth course for years. The deal will create one of the world’s largest corporate legal management conglomerates. BusyLamp has long been a cooperation partner of Deutscher AnwaltSpiegel. Thomas Wegerich spoke with the three founders: the two co-CEOs Manuel Meder and Michael Tal, as well as with Konstantin Tadrowski, the CTO of BusyLamp.
Business Law Magazin: The three of you started BusyLamp exactly ten years ago. Please outline for our readers how the company and the markets in which BusyLamp is active have developed since then.
Meder: Michael and I always wanted to start our own company – we’ve been best friends since our school days. After working in international law firms for a couple of years, we noticed that when it came to digitisation, and particularly legal spend management, legal departments still had some catching up to do, so we were aware there was a business opportunity. We were able to get Konstantin on board and all three of us decided to take the plunge into self-employment –something that many of our family members and professional colleagues could not really understand. It turns out that the doubters were not entirely wrong. After all, we had entered a market from a quite comfortable situation with a completely untested idea, which in fact did not yet exist in this country.
Tal: That’s right. When we started, the terms “legal tech” or at least “legal operations” did not exist. Our awareness of this fact caused some financial hardship in the first few years, and also led to some sleepless nights. We began to have doubts as to whether the whole thing was really such a great idea after all. Our expansion into the US and UK, where the legal departments were already further along in terms of digital legal spend management, changed the situation and since 2014 we have continuously grown, also here in Germany. Looking back, it is remarkable how much the market has changed, especially in Europe. In our view, this development will continue to pick up speed. We expect to see a further push for digitisation in the coming years.
Tadrowski: We have also been able to observe the degree of maturity of the legal departments from our customer requests. While legal departments initially approached us with basic requirements, our software is now mapping complex processes, such as those implemented within international enterprises. By the way, as it is our tenth anniversary, it is worth mentioning that although we actually founded the company in September 2011, our product was still a long way from the market. It’s just that it was important to my lawyer colleagues that the articles of association be concluded early, because otherwise they would not have dared to leave their law firms – after all, they’re not as brave as they pretend to be [laughs].
Business Law Magazin: What made you decide to sell to Onit at the present time and what is the entrepreneurial profile of the new parent company?
Meder: We decided at the beginning of the year that we wanted to take the next big step with BusyLamp in 2021, so that we could remain in a strong position and continue to grow rapidly. Even against the backdrop of the coronavirus, BusyLamp has been able to increase its annual recurring revenue (ARR) by more than 60% in the last 12 months. Hyperion Research recognised us as “highly innovative” and “a market leader.” Our alternatives were a private equity investment or a merger with a competitor or another strategist. After intensively reviewing these various options, it quickly became clear that Onit was the best partner for all BusyLamp stakeholders, and that our customers in particular would benefit greatly from the acquisition.
Tal: BusyLamp is just a wonderful match for Onit. By merging with BusyLamp, Onit is strengthening its European market presence with more local experts who not only speak the language, but also understand the business and technology needs of corporate legal departments in Europe. At the same time, our clients can expect several benefits from the acquisition. They will benefit from the fact that BusyLamp now has access to Onit’s international network and will gain additional technologies such as contract lifecycle management, legal service requests and legal holds. Onit’s AI-powered invoice verification solution, InvoiceAI, will also be made available.
Business Law Magazin: In the future, BusyLamp will be integrated into the Onit Group as a subsidiary. What are the consequences of the takeover for the 70-or-so current employees as well as the Frankfurt branch and – above all – your own professional future?
Meder: BusyLamp will operate as an independent subsidiary of Onit. All employees and the founder/management team will remain on board. Onit is committed to growth. It is now a matter of best utilising and developing the new potential that this acquisition provides.
Tal: We look forward to witnessing and continuing to play a part in this new chapter of BusyLamp. It will be an exciting experience for all of us. The entire team is looking to the future with a lot of energy and confidence.
Tadrowski: Our headquarters, the Frankfurt office, will remain. We are also in the process of opening new offices in London together with Onit.
Business Law Magazin: What is the significance of the acquisition for BusyLamp with regard to the technological development of the products as well as market and customer access in Germany and abroad?
Meder: We will now fully concentrate on Europe and the market outside the U.S. with our legal spend management solution, eBilling.Space. In this regard, Onit has a good handle on the U.S. market with its own products and the SimpleLegal solution.
Tal: The plan is to globally distribute our brand-new matter management solution, Matter.Space. In Germany we have already been able to achieve great success in the first weeks since the launch and see promising synergies and positive sales effects due to Onit’s international network.
Tadrowski: As the number of customers grows, so does the number and diversity of customer requirements, which in turn has a challenging effect on our development roadmap. I am pleased that we have found a strong partner in Onit who will help us to further increase our development speed in the future. Onit is considered a pioneer in our business field and boasts an exceptional level of expertise from which we can also benefit greatly with regard to the development of our technologies.
Business Law Magazin: Finally, let’s take a glance into the crystal ball: Where do you see BusyLamp two years from today, and then five years from today?
Meder: We are convinced that the Onit Group will be the undisputed market leader in five years. We don’t see any competitor at the moment that is comparably as well positioned in terms of product portfolio, innovation and team.
Tal: There is nothing to add to that.
Business Law Magazin: Gentlemen, thank you very much for your personal statements and assessments at short notice. We will follow the further development of BusyLamp with interest.