Founded in 2008 by software developers focused on building websites for small and medium enterprises, BaseKit is a Software-as-a-Service (SaaS) company that enables individuals and businesses to build an online presence by providing a toolkit for the design and implementation of websites, stores, and blogs.
BaseKit was formed from a passion for helping companies – particularly SMEs – to take greater ownership of their online presence. Having developed the BaseKit system as an internal tool to streamline processes and assist more clients, the company’s founders soon realised that the solution had a broader scope and value as a product that could be delivered directly to the global SME market.
From seed to scale-up
Having launched BaseKit in 2009, the company was one of 20 companies to receive a place in the Seedcamp startup accelerator and incubation programme. Seedcamp culminates in participants pitching their businesses to a group of investors for funding. Within their cohort, BaseKit was one of the winning pitches, providing the company with seed funding and introductions to a number of venture capital investors – many of which remain investors on the company’s board. This first round of seed capital provided BaseKit with the funds to build the first version of its product and hire a team to take it to market.
“Originally, we wanted to create something simple that small business could use and found considerable success with direct users. But within a year we were being approached by web hosting companies that saw how well BaseKit could meet the needs of their existing users. It became clear that this route to market would allow us to reach a greater number of users and focus on perfecting the product,” says Simon Best, BaseKit’s CEO.
The right product, for the right market, at the right time
In the modern era of digital communication, where online engagement is often the first port of call for consumers, it is increasingly critical for SMEs to have a visible online presence. However, a 2017 report by Approved Index indicates that 1.98 million SMEs do not have websites, costing them over £343 billion per annum.
Given the importance of the SME market to the UK economy and the changing face of consumer behaviour, BaseKit recognised the relevance of a product that would provide small business customers with a web presence and help them achieve digital transformation. In fact, data from the Office for National Statistics show that one of the top three contributors to SME business failure is the lack of an online presence.
“We know that web presence is vital for small businesses It is critical in combating declining revenues from traditional revenue streams,” says Best.
Servicing new markets – from web hosting to telecommunications providers
To reach a broad range of SMEs, BaseKit has actively engaged and partnered with web hosting companies around the world to provide cloud-based mobile solutions to their customers. This proved to be a successful route to market and naturally led to a focus on an additional distribution platform – telecommunications service providers.
“Telecommunications providers have a range of customers that can benefit from access to our platform. Such organisations present a new set of opportunities for BaseKit. The sales cycle, however, is longer than what we have previously experienced. This created a need for additional funding to ensure that we can focus on the acquisition of new telecoms customers,” adds Best.
When it became clear that future growth initiatives would centre on expansion within this sector, BaseKit began the process of engaging with a venture debt provider.
“We had a number of equity investors on board and, with the business and product having seen considerable success, we decided to explore growth capital options in the form of venture debt,” says Best.
“Many of our investors sit on our board and were invaluable in advising us and introducing us to a number of well-respected and trusted venture debt providers. That’s how we met BOOST&Co.”
Choosing the right venture debt partner – an introduction to BOOST&CO
In December 2017 BOOST&Co provided BaseKit with a £2.5 million growth capital loan.
“In looking for a venture debt partner, we weren’t just looking for the right terms – although that was of course critical. We were looking for a company that could understand our vision. BOOST&Co was a good fit – from the outset, we were able to communicate our goals in a very open and honest manner,” adds Best.
BOOST&Co specialises in providing non-dilutive venture debt loans to high-growth scale-ups and has a particular affinity for SaaS companies, having lent successfully to a large number of SaaS businesses.
“One-third of our portfolio consists of SaaS companies, so this is a market with which we are very comfortable and familiar. Following our preliminary meetings, it was clear that BaseKit offered significant growth potential and that it would be an attractive investment opportunity for BOOST&Co based on a proven product that is so well suited to current market trends, and high-quality revenues from a broad range of long-term customers,” says Joanna Scott, Principal at BOOST&Co.
“It was especially easy to support BaseKit’s growth journey after we received numerous positive references from the company’s existing customers – many of which see BaseKit as an important strategic partner for their own growth,” she adds.
The £2.5 million provided by BOOST&Co has enabled BaseKit to continue investing in its sales and marketing teams, as well as product development. In addition, the funding has facilitated a new level of focus on expanding BaseKit’s reach within the telecommunications sector.
BaseKit initiated the funding process by preparing a clear business plan containing detailed forecasts. This was instrumental in enabling a streamlined funding decision-making process, as BOOST&Co was able to quickly identify and formulate queries and acquire clarification from BaseKit.
“The entire funding process was clearly articulated and managed by Joanna at all stages. Moving forward to the due diligence, whilst this was far more in-depth, it was scheduled promptly and carried out quickly. Throughout the process, expectations were set and we were kept informed of anticipated dates or timings at key points,” says Best.
Funding success story
Today, BaseKit continues to successfully implement its vision for growth. The product supports 29 languages and is the most widely deployed website editor by hosting, telco and internet companies around the world. The company employs 55 people, with a product that is licensed by more than 100 hosting and telecommunications companies around the world, and that has been used to create 8 million websites, stores and blogs.
But BaseKit’s vision doesn’t end there.
Modern telecommunications providers are transforming their businesses and diversifying their product offerings to include digital products. With this diversification comes a significant opportunity for these companies to serve a new breed of digital native small businesses – the audience that the BaseKit product has been designed for and built to cater to. For a company just beginning its journey with telecoms companies, BaseKit expects to see significant growth within this sector. And with its unique mobile approach to web presence, BaseKit will continue to reach out to the emerging markets in which mobile is so critical to success.
Looking to the future
“BOOST&Co invests in companies when we believe in their management teams and their vision for the future. BaseKit ticks all of those boxes, so we’re excited to join BaseKit on its growth journey in the coming years,” says Scott.
“Venture debt is a great option for businesses at a stage where there is proven and stable revenue and a solid strategy for continuous growth. BaseKit has big growth targets for 2018 and 2019, and BOOST&Co’s funding will help us to continue investing in the right areas to ensure we attain those goals,” concludes Best.
BaseKit secures £2.5 M in growth capital funding from BOOST&Co
Read the full case study here