Case study: Projectworks
New Zealand based Projectworks is a cloud-based business management platform designed specifically for the professional services industry. Their recent capital raise through Snowball Effect has enabled them to scale for further overseas expansion.
Background
Software as a service (SaaS) platform Projectworks approached Snowball Effect wanting to raise capital to help drive future growth. According to Fortune Business Insights, the global market for cloud-based services such as Projectworks is on a growth trajectory and is expected to grow at a 17.9% compound annual growth rate (CAGR) to reach USD790b by 2028.
Snowball Effect’s priority was to act as an advisor to Projectworks and broker investment from a range of investors - with a key focus on experienced venture capital funds with a background in scaling SaaS businesses globally and strategic high net worths, company employees and clients. Incoming investors would join the company's founders, early investors and major shareholder Bridgewest, a global private equity fund with investments in innovative software, in supporting the company's growth.
We were engaged in preparing the Information Memorandum (IM) and data room for the raise. Additionally, Snowball Effect advised on the structure for the transaction of the key offer terms. We also introduced the company to Flacks & Wong lawyers, who prepared all key legal documents.
About Projectworks
Founded in 2019, Wellington-based Projectworks is a cloud-based business management platform designed specifically for the professional services industry. The SaaS platform helps to simplify project management, project financials, and people management, enabling businesses to increase utilisation and profitability.
Over the last few years, the Kiwi startup has built a world-class platform used in 40 countries and has surpassed the $1.3m ARR mark. In addition, the platform seamlessly integrates with many other cloud-based products, including Xero, QuickBooks, MYOB, Salesforce, HubSpot, and Jira.
Projectworks' intuitive interface has resulted in a loyal customer base, with the business growing annual recurring revenue by 170% in the past 12 months. International markets have also grown rapidly, with 80% of their revenue from offshore.
In 2020, Projectworks won Xero Emerging App Partner of the Year, while in 2021, it was a finalist for the highly coveted Xero App Partner of the Year award.
The outcome
Thirty shareholders invested $3.5m in Projectworks. Of this, venture capital investment firm Punakaiki Fund invested $2m, with the remaining $1.5m brokered by Snowball Effect and coming from a range of high net worth investors with experience in the SaaS industry, as well as Projectworks’ founders and employees.
There was considerable interest in Projectworks' capital raise. However, due to Punakaiki's substantial investment involvement, some investors missed out on this round since they didn't invest quickly enough. To avoid disappointment, we recommend investing within an offer's early access period rather than waiting until the last minute.
The funds raised have enabled Projectworks to increase its investment in sales, marketing and customer support and build out the technical functionality of the platform.
"We had a great experience with Snowball Effect. We had a strong plan, we were in a safe pair of hands, and it was well organised and under control. Snowball acted as our investment banker, is well networked and very much knows what they are doing. The Information Memorandum (IM) preparation was very professional and I've received a lot of comments on how polished the IM was and think this played a key part in gaining interest from investors."
Matthew Hayter — Projectworks CEO
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