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 Company: SciQuest, Inc., Cary, NC
Entry Submitted By: Davies Murphy Group
Company Description: SciQuest is the global leader in helping academic and research-centric organizations realize the potential of strategic procurement. The company’s specialized knowledge, on-demand software, and services-first approach empower more than 100 of the best-known academic, pharmaceutical, biotechnology and research organizations to manage spend, drive ROI, and advance their critical missions.
Nomination Category: Company Categories
Nomination Sub Category: Best Business Turnaround
Nomination Title: SciQuest becomes only profitable e-procurement leader
- Tell the story about what this nominated company achieved since January 1 2007 (up to 500 words). Focus on specific accomplishments, and relate these accomplishments to past performance or industry norms. Be sure to mention obstacles overcome, innovations or discoveries made, and outcomes:
SciQuest is the global leader empowering enterprises to realize the potential of
strategic procurement. Looking at SciQuest today, the only profitable
e-procurement provider in a $2.8 billion global market, you wouldn’t know how
far the company has traveled.
SciQuest, originally an e-market exchange, went public in 1999 with a $2
billion market cap. Two years later, SciQuest was on the verge of shutting its
doors: the gross profit margin was running at 2% and the company was burning
$25 million a quarter. With only $50 million in its coffers, this prototype
for the dot.com era was on track to run out of cash by year’s end.
There was uncertainty whether anyone could salvage SciQuest, let alone make it
profitable.
The changes were strategic:
1. Realigning the workforce – To continue operating, SciQuest decreased
headcount from 550 to 85 employees, and leveraged the talent on board to
evaluate the business.
2. Changing the business model - Pharmaceutical companies were looking for
better ways to electronically integrate with suppliers. While SciQuest helped
address this issue, it was operating with the wrong business model. SciQuest
took a mid-course correction and re-focused its business – from an online
marketplace buying goods and selling them at a slim margin to a services-
oriented software company. Software-as-a-service (SaaS) was new at the time,
but it enabled SciQuest to effectively deliver e-procurement solutions, while
ensuring sustainable revenue.
3. Going private - It cost SciQuest $2.5 million a year to be publicly traded –
making it difficult to attract investors and meet strict compliance
regulations. In 2004, SciQuest took an unusual step (at the time) by going
private, freeing the company to focus on the business.
The turnaround has taken nearly seven years, but success has been about the
long view. 2007 marks the culmination of SciQuest’s vision:
- SciQuest currently has 145 employees; expected to grow to 156+ in 2008.
- SciQuest will generate $24 million in revenue, $4 million in free cash and
will be EBITDA positive in 2007.
- SciQuest has grown its revenues at a 59% CAGR over the past three years and
its customer base at 66% CAGR since 2002.
- SciQuest is the only profitable e-procurement company in a global market
estimated at $2.8 billion.
- Via its SaaS model, SciQuest has a current contractual backlog of over $120
million.
- Only 5% of the 550 SaaS providers started in the past five years generate
revenues greater than $15 million. SciQuest is one of them.
- SciQuest signed its 100th customer.
- 99% customer renewal rate
- Additional 2007 recognition: a) Inc. 5,000 list of the fastest growing
private companies in America, b) 2007 Growth Company of the Year by the
Council for Entrepreneurial Development, c)Global Logistics & Supply Chain
Strategies - Great Supply Chain Partners, d)Named a Best Place to Work -
Triangle Business Journal
- List hyperlinks to any online news stories, press releases, or other documents that support the claims made in the section above. IMPORTANT: Begin each link with http://, and enclose each link in square brackets; for example, [http://www.youraddress.com]:
2007 article – River Cities Capital Funds “SciQuest a turnaround story”
http://www.rccf.com/news.php?view=release&releaseID=58
Wiehe discusses company turnaround at event by Business Leader Media
http://carolinanewswire.com/news/News.cgi?database=1events.db&command=viewone&id=
464&op=t
SciQuest recognized as best place to work
http://www.sciquest.com/company/media-relations/news/2007/10/8/sciquest-recognized-as-a-
best-place-to-work-by-the-triangle-business-journal/
SciQuest listed in Inc 5000
http://www.inc.com/inc5000/2007/company-profile.html?id=200724180
SciQuest named Growth Company of the Year
http://www.sciquest.com/company/media-relations/news/2007/7/2/sciquest-named-growth-
company-of-the-year-by-council-for-entrepreneurial-development/
- Provide a brief (up to 100 words) biography about the leader of this nominated company:
Steve is responsible for the management, growth and success of SciQuest's
business operations. He oversees the company's day-to-day operations in
addition to leading corporate strategic initiatives.
Steve has significant experience as a successful technology entrepreneur as
well as in senior corporate management. Before SciQuest, he served as senior
director, strategic investments & mergers and acquisitions at SAS Institute in
Raleigh, North Carolina. Before that he was president/CEO of DataFlux
Corporation.
Before joining DataFlux, Steve had been managing director/Europe and senior
executive VP for SunGard Treasury Systems, a division of SunGard Data Systems,
and president/CEO of Multinational Computer Models, Inc.
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