Inside the war rooms of today's networked enterprises

Inside the war rooms of today's networked enterprises

Ansarada's virtual data rooms allow parties anywhere in the world to exchange sensitive information online.

Sam Riley is not a technology whiz, but he has an eye for a business opportunity. Andrew Slavin is a technology whiz, but has no interest in running his own business. It was a mismatch made in heaven, and the result was the formation of Ansarada, a company that provides virtual online data rooms. Virtual data rooms are based on secure technology that enables parties from anywhere in the world to exchange sensitive information online.

The technology is typically used by investment banks, law firms and private equity firms when brokering mergers and acquisitions. More than $60 billion of transactions has coursed through Ansarada's data rooms since the business was established in 2005.

Riley, Ansarada's managing director, describes director of technology Slavin as "the brains behind the company" - he developed the technology platform on which the business is based.

Slavin became aware of online data rooms while head of technology at Australian online accommodation wholesaler Flairview Travel, which in 2004 was acquired by a United States company.

Slavin observed the online data room concept in action - and decided he could improve on the technology. He developed a prototype system, based on the software-as-a-service model.

Instead of clients requiring their own software infrastructure to support data room applications, SaaS enables multiple users to access, review and update information through an internet browser. Slavin's focus was on providing users with improved functionality, including speed, security and ease of use.

"The differentiator was the amount of things that the people who own the data rooms could do for themselves," he says. This included the ability to set different levels of user access, the capacity to post new documents instantly and amend existing documents, and track who is downloading and printing information.

Intuitively, Slavin felt that he could build a business around the technology - but he didn't really know. "I don't think that way," he says.

Slavin was only interested in the technology. "For me it was the joy and pleasure of creating something. I knew that while I could build the technology I couldn't build a business around it."

A friend introduced Slavin to Riley, who had a background in sales and marketing and who had experience running his own business.

Riley instantly saw the potential of Slavin's prototype. Two more partners were recruited and the business was registered in 2005 with four owners - Slavin, Riley, his sister Rachel (Ansarada's finance director) and Daphane Chang, who is a non-executive director. (Ansarada is an acronym of the first names of the co-owners.)

It was one year before Ansarada secured its first client - KPMG. Others followed, including Deloitte, investment bank UBS and law firms Gilbert+Tobin, Blake Dawson and Minter Ellison.

Revenue has increased from $500,000 in 2006-07 to $1.5 million in 2007-08, and the Sydney company has expanded into overseas markets, servicing projects for Australian clients as well as winning local business.

Ansarada has offices in Singapore, where its clients include Chinese private equity firm Hony Capital and Malaysian bank CIMB, and London, from where it services projects for Australian clients law firm Baker & McKenzie and venture capital firm CVC Group. The National Bank of Dubai is also a client.

In August, Ansarada will open a New York office, although a business development team has already lined up clients that include investment bank Houlihan Lokey, several biotechnology companies (which use online data rooms to exchange intellectual property information with pharmaceutical companies) and a Chicago company involved in an international acquisition.

Ansarada employs 20 people, who are evenly split between its Australian and overseas offices.

Mergers and acquisitions remain Ansarada's core business, but it has also identified other applications involving the exchange of sensitive information, which is helping to broaden the base of the business. "There are always new vertical markets presenting themselves," Riley says. They include capital raising, "virtual boardroom" services, enabling directors to access documents securely from remote locations, and government tendering.

Ansarada has just signed a contract to provide online data room services for the Victorian government's worldwide tender to operate Melbourne's trains and trams. Nine international companies have bid for the contracts, with the winners to be announced in mid-2009.

The four original partners in Ansarada own 72 per cent of the business. The rest is divided between a fifth principal partner, Steven Humphries, an M&A principal with law firm McCabe Terrill, and an investment syndicate.

Riley is coy about the identity of the syndicate members, allowing only that they are from the M&A fraternity. "It is a group of investors, many of whom were clients previously, who were so impressed by the Ansarada business, our track record and future prospects that they formed a syndicate to invest," he says.

Riley describes himself as a "serial entrepreneur". As a seven-year-old, he operated a neighbourhood car wash in New South Wales' Blue Mountains. More recent ventures include an online business and a juice bar and coffee shop - "nothing of significance, but all very good building blocks".

Of his experience running the cafe, which he and a friend established when in their early 20s, Riley says: "The experience of starting, running for two years and failing at your own business at an early age was invaluable."

Riley is a hands-on managing director. When BRW spoke to him, he was in London recruiting staff, training new employees and meeting prospective clients. Slavin remains the reluctant entrepreneur. "I'm not a business-minded person, I'm a technology-minded person - which is why I took steps to find business people to help me build the business," he says.

Slavin prefers to focus on refining and enhancing his data room technology. Although he does tend to his responsibilities as an owner of the business, it is, he says, "a required distraction".

"I want to be involved in the decision-making," he says, "but I try to involve myself as little as possible because it is a distraction that takes me away from developing the technology. When you develop technology you have to eat and sleep it."

Accentuate the positive

Ansarada uses client feedback to continually refine its technology, managing director Sam Riley says. "We won't do anything until we have surveyed all our clients about their needs."

Riley considers experience of business failure a positive. Following the failure of a previous venture, "I made a list of everything that was positive and everything that was negative from the experience. I then made sure that any future business opportunities maximised the positives and avoided or minimised the negatives."

Co-owner Andrew Slavin works to his strengths: "My focus has always been on the technology. It was Sam who did the research and said, 'Yes, we can build a business with this'."

Ansarada is open to new markets. "People will say to us, 'Can you do this?', and we'll think about it, and we realise that here's another market we can pursue. There are always new vertical markets presenting themselves," Riley says.

Fairfax Business Media

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Tags strategyMergers and acquisitionsData managemententerprise applicationsentrepreneurship

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