Bain Dry Powder: The Private Equity Podcast With Vista’s Robert F. Smith. PART 1 PART 2

Case Study / Pursuing A Growth Strategy That Spurs Innovation

Pursuing A Growth Strategy That Spurs Innovation

Endorsements presented herein are made by current or former employees of Vista portfolio companies, over which Vista may have the ability to exercise discretion on employee compensation, promotion and other employment decisions.

How Xactly found an investment partner to advance its market position and product capabilities.

Designing the right incentives to inspire sales professionals and align performance with business goals is critical to the financial health of an organization. However, compensation is often one of the most complex expenses for any company to manage.

Xactly, a provider of cloud-based incentive solutions, pioneered the SaaS business model in its market and aggregated an unrivaled database of sales planning and performance information. With its software, Xactly’s customers can design better compensation plans that drive employee performance using automation and predictive insights.

Founder and CEO Chris Cabrera helped to secure an IPO for the company in 2015 but quickly realized that with this financial strategy, the company was not optimized to support his goals for penetrating the market. From a revenue standpoint, Xactly was on the smaller side for a public company, but Cabrera had aspirations to grow the business both organically and inorganically. With his board interested in staying the course to ensure earnings remained stable, Cabrera began to consider private equity as a way off of the “quarterly treadmill.”

He had concerns about some private equity firms’ investment criteria that centered around metrics like EBITDA and liquidity but found that the Vista team used alternative indicators for a company’s potential long-term ROI. Xactly had been missing out on portions of the market, and Vista’s approach would focus on acquisitions while also attracting the right talent.

As Cabrera puts it, this was music to his ears. Beyond aligning strategically, it was also important to him that Xactly’s potential partner championed cultural, gender and experience diversity as essential to innovation and success, and he found that in Vista.

In the year since Vista took Xactly private, Cabrera has seen these shared values in action and experienced benefits from the partnership that reach beyond financial investment. Access to the expertise of Vista professionals as well as executives and technologists from other Vista companies has sparked innovation at Xactly. Engineers from the company can discuss and test new technical capabilities with a diverse network of peers. As a result, the company was the first in its space to launch a machine learning model that identifies potential employee turnover risks and reduces attrition costs.

In addition to advancing product development, Vista’s guidance is helping Cabrera grow the company in size and potential. Since partnering in 2017, Xactly has hired hundreds of additional employees and acquired two companies, adding powerful sales planning and incentive and territory management capabilities to the company’s enterprise sales performance management portfolio. Considering the market opportunity, Cabrera sees Xactly on a continuous path of growth, and it has found a partner that shares his ambition in Vista.

Please see the “Case Studies” section of the Disclosures page for important information about these Case Studies.

I get to focus on growing my company faster and making it better – Vista helps me do that. What’s not to be excited about?

Chris Cabrera, Founder and CEO, Xactly


Year of Investment: 2017
Portfolio Status: Current
Headquarters: San Jose, CA

Cloud-based incentive compensation solutions for employee and sales performance management.

Xactly Corporation develops cloud-based, enterprise-class incentive compensation solutions that enable employers to design and automate compensation plans which align employee incentives with business goals. The Company’s SaaS solutions optimize sales performance, employee behavior and strategic decision making while reducing risk and error rates in compensation calculations. Xactly is the first fully cloud-based, multi-tenant provider focusing solely on the incentive compensation and employee and sales performance management markets. The Company’s solutions are used by customers in industries which include financial services, travel/hospitality, life sciences, media and internet, communications, business services, high-tech manufacturing, software and more.

Xactly was founded in 2005 and is based in San Jose, CA, with operations worldwide.

Vista Equity Partners Fund VI completed a take-private of Xactly in July 2017.

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