Manufacturing ERP (enterprise resource planning) company Plex has been on IPO-watch for more than a year and continues to make the kind of moves that would suggest that milestone could be coming sooner than later. Today, the company, which helps businesses optimize production, quality control, and inventory management, announced the addition of public markets veteran Don Clarke as its CFO. Clarke was most recently the CFO of Eloqua, leading the company over a 5-year period up to and through its 2012 IPO and eventual sale to Oracle.
“An IPO is an absolute reality based on our path, but it’s just one of many milestones,” says Plex CEO Jason Blessing. “We’re focused right now on driving strong top-line growth and building a great company.”
Plex approached 400 customers in 2013, strengthening its market lead in the discrete manufacturing category that includes automotive, aerospace, and defense, while also expanding into processing manufacturing verticals like food and beverage. In total, the company now manages more than 1,100 customer production operations worldwide in 20 countries (the majority of its customers are headquartered in North America). Plex grew revenue by 30 percent to $50 million in 2012 and projected exceeding that rate in 2013, but has not yet revealed its year-end results.
Clarke is an important hire, Blessing says, not just for his experience within larger companies and at the public company level, but for his unusual ability to span departments. In addition to his time as the CFO of several public companies, he’s also served as President of dealer and distributor software supplier eCommerce Industries.
“Going public is more than SARBOX and communicating the story at a public company level,” Clarke says. “It’s creating predictability, instituting processes and training, shoring up development processes. Plex has a bright future, and it will continue to be about bringing right people. It’s very comparable to Eloqua, which was at just $20 million in revenue when I joined.”
Plex has made a habit of raiding the Eloqua and Oracel executive suite. Blessing was previously a Senior Vice President, Application Development at Oracle, joining the conglomerate through its acquisition of Taleo. Plex also hired former Eloqua CMO and Taleo head of global marketing Heidi Melin as its new CMO in May. Both hires came after the company completed a private equity buyout, and subsequently closed a $30 million growth stage venture round from Accel Partners (a PandoDaily investor).
In many ways, this is part of the enterprise playbook. When companies get hot, they start poaching from the previous generation’s success stories. Andreessen Horowitz partner and PandoDaily investor Chris Dixon explained as much during his May 2013 PandoMonthly, saying, the biggest advantage of being in the Bay Area is the ability to pull experience off the shelf and bolt on another 100 employees – as well as a few key execs – who have been there and done that.
Plex’s focus at this point is widening the gap between itself and the competition. The rule of thumb in the industry is that companies change ERPs every seven to 10 years, although that may be accelerating due to declining switching costs and the increased flexibility of cloud deployment. This means that a number of companies who paid millions to install legacy platforms like those from Oracle and SAP over the last decade are coming due for an upgrade. It’s a big opportunity with the manufacturing sector representing 50 percent of global ERP spending according to the company.
“We can model how much of the market is up for grabs in any given year and measure bookings against that demand,” Blessing explains. “Our largest deal last year was an Oracle replacement that paid for itself for the client in terms of ROI in just 12 months.”
Since the addition of Melin, Plex has been undergoing a radical rebranding and working to build a demand-generation engine in industries beyond its automotive and aerospace bread and butter.
“The most important thing for us and coincidentally the thing I’m most unsatisfied with is getting the Plex story out there in the marketplace,” Blessing says. “We have a great story in terms of helping bring manufacturing back to the US and in a sort of David versus Goliath narrative going up against Oracle and SAP.”
The addition of marquee executives and a rapidly growing list of multinational clients should help spread the word about Plex. An IPO shouldn’t hurt either, although that’s little more than a single milestone on a longer journey.