How Aussie tech consultancy startup Transpire came to be acquired by a Brazilian unicorn for $23.4 million
Transpire is the technology partner of some of Australia’s biggest businesses, including Vodafone and Virgin Australia.
When Transpire co-founder Josh Guest sat watching the earnings call of global digital specialist CI&T, in which it discussed its acquisition of his company Transpire, it all began to sink in.
“I was able to sit back and say, wow this is actually happening,” Guest said.
“Behind the scenes it’s months and months of hard work to get to that point.
“Absolutely surreal, that’s when it kind of clicked. It’s actually happening, we’re actually doing this, and (Transpire) has now got to the world.”
CI&T, a Brazilian unicorn listed on the New York Stock Exchange, acquired the Melbourne-based technology consultancy for $23.4 million. In that earnings call last week, CI&T CEO Cesar Gon said the acquisition is part of its strategy for expanding its reach.
“We now have a good platform for expanding in Australia, one of the largest and good market for digital services, in the same size of Brazil,” he told analysts and reporters.
“So it’s an amazing opportunity for speed up our growth, not only in Australia, but in the Asia pacific region.”
Founded as b2loud in 2009 by Guest and Luke Smorgon, it re-branded to Transpire in 2017, it’s the technology partner of some of Australia’s biggest businesses, including Vodafone and Virgin Australia. It’s 90-strong team, including Guest, will join CI&T. Smorgon will exit as chair of the company to focus his time on the family business.
Transpire recorded $15.5 million in net revenue over the last financial year. Guest says during the early stages of the pandemic, the leadership team set a new vision for the company to go global as it started to experience significant growth when Australian businesses were forced online in a more fundamental way than ever before.
“What happened over COVID-19 is the needs of enterprise in Australia to invest in digital and connect with their customers when they can’t come into bricks and mortar, every business case got accelerated over COVID-19 and continued,” Guest said.
As the Transpire team discussed plans to expand the business globally, it was also considering acquiring other businesses. Guest says they had gone so far as meeting with CEOs in order to get and understanding of what was out there in the Australian market.
But the aforementioned growth meant that when Transpire was approached by CI&T, it was negotiating from a position of strength.
“Every metric in Transpire was ahead of target,” Guest said.
“Our culture scores, our financial scores, incredible growth. So when you go into a M&A discussion, you can go into it with a lot of confidence. Pitch to us. How are you going to help us? We weren’t running a process, we weren’t looking for M&A. This just happened to go along.”
What appealed most about CI&T was its global reach, and a connection with its founders. CI&T co-founder Bruno Guicardi currently serves as it’s president, while fellow co-founder Gon is it’s CEO.
“When I first met with CI&T, I’m talking to the founders. Two founders who 27 years ago have built that business,” Guest said.
“There are not many entrepreneurs who are still running their business after 27 years and now have a public company that’s gone global.”
Against a backdrop of rising interest rates in order to combat inflation, Guest says Transpire’s outlook remains strong.
“We’re still seeing significant investment in digital within tier one enterprise,” he said.
While demand might still be strong, one area that is providing difficult is hiring.
“What I am seeing is that we’re greatly short of technologists here in Australia,” he said.
“I can tell you hiring in an environment when you have such low unemployment and particularly within tech, those roles are most in demand, in all industries, it’s very difficult.”
Offering a final reflection on Transpire’s journey from founding to acquisition, Guest notes how important it is co-founders to build a strong relationship with one another.
“Both of us being able to step up as professionals, underpinning all of that is you actually have a great relationship,” he said.
“Help each other up when the other one’s down. And when there’s change support each other. That’s a critical part of building a business, that partnership.”
