A recent history of association technology investments

UPDATED May 17, 2017.

In preparing for my presentation at AMSFest, I went back and looked at all M&A and investment activity that has been reported so far on theNIRD.org.

Keeping in mind that what’s reported here is only what I’ve learned about (it’s likely there are more investments that haven’t been reported here), here’s what I’ve got since April 2016:

  • April 2016: Fonteva took $2M in crowdfunded venture capital growth funding
  • July 2016: Advanced Solutions International (iMIS) took $26M in private equity growth funding
  • September 2016: MemberSuite accepted $11M in venture capital growth funding
  • September 2016: Higher Logic accepted $55M in private equity growth funding
  • January 2017: Higher Logic acquired Socious. The size of the deal was not disclosed, but it was rumored to be in the $15-25M range.
  • February 2017: YourMembership was acquired by Ministry Brands. It is rumored that the sales price for YourMembership was around $230M.
  • February 2017: Higher Logic acquired Kavi. The size of the deal was not disclosed, but it was rumored to be in the $10-20M range.
  • February 2017: MemberClicks accepted a round of private equity growth funding. The investment was rumored to be between $15-20M.
  • April 2017: Abila was acquired by Community Brands. The deal was rumored to be around $290M.
  • April 2017: Aptify was acquired by Community Brands. The deal was rumored to be approximately $30-40M.
  • April 2017: Blue Sky eLearn accepted an investment from Freeman Digital Ventures. Terms were not disclosed.
  • April 2017: NimbleUser was acquired by Community Brands. The deal was estimated to be in the $15-25M range.

For those keeping score at home, that’s 12 deals for a minimum of about $700M invested in association technology companies in the past year. And those are only the deals we know about.

ANALYSIS: NimbleUser joins Community Brands family

A mere three weeks after Aptify and Abila got under the Community Brands umbrella, on April 26, 2017 it was announced that NimbleUser would be joining them.

NimbleUser is a Rochester, NY based company that has spent the last decade building a Salesforce-powered AMS called NimbleAMS. Prior to releasing the NimbleAMS product in late 2011, NimbleUser was an iMIS reseller and Solution Provider. A family owned business up until a few days ago, Sig VanDamme is the Founder, his wife, Dawn, serves as CEO, and Joe Klimek serves as President.

Industry observers had mixed reactions to the deal. Some were surprised, knowing that Sig and Dawn have a strong commitment to the city of Rochester, and their company culture —  a deal that could risk the product of their life’s work seemed out of alignment with their values.

Others saw the writing on the wall: NimbleUser was one of only a few enterprise AMS companies to have not taken any funding. NimbleUser needed growth capital to accelerate product development. A phone interview with Sig VanDamme confirmed it. He said the alternative, continuing to fund research and development out of their own revenues, would result in delayed time to market for a number of initiatives they had on their roadmap.

Interest among association technologists in Salesforce-based AMS products has been climbing along with Salesforce’s rise to become one of the world’s most innovative and largest companies. Hitching your AMS to a database core that receives almost a billion dollars of R&D annually is attractive. But all that R&D money comes at a cost: Salesforce-based platforms are among the most expensive solutions on the market, competitive with other enterprise-grade AMS platforms.

NimbleAMS competes head-to-head with Fonteva’s MemberNation platform, which is also Salesforce-powered. They also compete (less directly) against other enterprise-grade AMS platforms like Personify, iMIS, Abila’s netFORUM Enterprise, and Aptify.

That’s right! If you’re keeping score at home, Community Brands now has three enterprise-grade AMS platforms in its pen: NimbleAMS, Aptify, and netFORUM Enterprise. While it’s still very early in Community Brands’ history, this fact should serve as evidence that they intend to deliver on the promise to allow its companies to compete for business. After all, why would anyone add another competitor to the pen if you didn’t really expect them to fight it out?

At the same time, some industry insiders acknowledge that this deal reduces choice for enterprise-grade AMS products; three of the seven are now owned by the same parent company. In interviews I conducted with association technology consultants, some prospects now feel like they’re “negotiating with themselves.” How much leverage does a prospect really have when they press two companies owned by the same parent for better contract terms?

What does this deal mean for NimbleAMS customers? In my view, not much. A Salesforce-powered AMS should be expected to stand on its own for as long as Salesforce is in business. Any risk that Nimble might be merged with Aptify or netFORUM Enterprise is very remote. However, based on a pattern that I’ve witnessed with other family owned companies that become investor-backed, there is a higher risk that the business processes will be more substantially impacted than a company that passes from one investor to another. NimbleUser customers should be prepared for some adjustments in the transition.

RUMOR: Enterprise AMS has letter of intent to be acquired

I’m hearing rumors from several knowledgeable sources that an enterprise level AMS has been holding a letter of intent to be acquired for months.

Why don’t I name the companies in rumor posts? Check out theNIRD.org’s policies.

Does the Ministry Brands story foreshadow the Community Brands story?

This article on ChurchTechToday about the Ministry Brands consolidation could be viewed as a sign of things to come with Community Brands. If you really want to geek out on what Community Brands may have up their sleeve, read this article from October 2016 and the comments.

Community Brands welcomes NimbleUser to its family of companies

I received a tip yesterday afternoon that NimbleUser would be welcomed to the Community Brands family of companies. This post was scheduled yesterday evening, on the request of my source, and will be updated as new details, including a press release, are made available. The press release is scheduled to go out in the early morning hours according to my sources.

For those unfamiliar, NimbleUser’s flagship product is NimbleAMS, a Salesforce-powered AMS. They’re based in Rochester, NY, and Sigmund VanDamme is their Founder.  NimbleUser may be best known in the association sector for their retro Airstream camper which they haul to major trade shows.

RUMOR: Community Brands is about to announce a new family member

I have it from a well-placed source that Community Brands will announce that it has added a new member to its family of customers. The YourMembership users conference wraps up tomorrow, and this deal could be seen as the big news to cap off this gathering of the lead company in the Community Brands consolidation.

ANALYSIS Part 4 of 4: YourMembership leads the Community Brands consolidation

In the time since the Community Brands deals were announced, I’ve spoken with senior executives at Abila, Aptify, YourMembership, and some of their competitors. I also attended the Abila Users & Developers Conference, speaking with their customers and consultants, and listened to a keynote presentation from JP Guilbault, Community Brands’ CEO.

I’ve been analyzing the implications of this deal from the standpoint of each company wrapped up in the transaction, based on the conversations I’ve had with my sources.

Today’s post is about YourMembership.

It’s safe to say that YourMembership (YM) is the lead company in the Community Brands consolidation. The CEO of YM, JP Guilbault, has ascended to the title of CEO of Community Brands and holds the title of CEO for both Aptify and Abila.

For background, in the past five years, YM has made a rapid rise to become a powerhouse AMS. In late 2012, YM (which stood with about 1,000 clients at the time) acquired Affiniscape, an Austin-based AMS with about 1,200 clients, making them one of the major AMS players in the small to mid-sized association market.

The Affiniscape acquisition was bumpy for customers, according to most accounts, and on ReviewMyAMS.com, you can see a pattern of customer dissatisfaction on YM right after the merger. Much like the Avectra/Abila merger, many of the Affiniscape staff departed shortly after the acquisition. Despite assurances made at the 2012 Affiniscape users conference that a best of breed AMS would come from the careful analysis of both products, clients were notified after the acquisition that their product would be deprecated, and a migration to YM would their only choice — unless they wanted to move to another AMS. Clearly, this angered many Affiniscape clients. Adding insult to injury, many Affiniscape clients felt their migrations to YM weren’t handled with care. Ultimately YM doubled down its investment on migrations and the experience improved. It took years for YM to undo the damage, but they eventually did, and now they enjoy a mostly happy clientele. JP Guilbault admits that he reflects on the Affiniscape acquisition as a learning experience, and one that he vows not to repeat.

But doubling their customer base with Affiniscape was only the beginning. YM acquired job board platform Job Target and learning management system platform Digital Ignite. Years after these acquisitions, the former CEOs of Job Target and Digital Ignite are still on staff with YM, their offices are still in place, as are many employees of those acquired companies. I believe this is evidence of a learning lesson from the Affiniscape acquisition, and is hopefully a foreshadowing of what should be expected for the Abila and Aptify deals, as well as future deals.

These acquisitions, combined with the development of an expertly executed marketing and sales strategy over the past five years resulted in YM being catapulted to one of the leading AMS and technology providers in the market, both in terms of customers and revenue. For this effort, YM was acquired by Ministry Brands in February 2017 for a hefty price tag of approximately $300 million, it’s rumored.

YM customers will be the least affected by this consolidation, according to the industry observers I’ve spoken to. They expect the inertia of JP Guilbault’s tenure with YM to continue for the foreseeable future. Because of this, we can predict that the products, office culture, pricing models, customer service practices, and staff from the legacy YM company to be more difficult to unseat going forward under Community Brands than those of Abila and Aptify.

Therefore, Abila and Aptify personnel and customers should expect aspects of YM’s business practices to be applied to them. That change may be painful at first, but in the long run, it will probably be for the best, as the personnel will be more efficient as duplicative processes are eliminated.

Most consultants and YM customers we’ve spoken to are taking a cautious, wait-and-see approach. Most customers seem to have gotten over the problems experienced during the Affiniscape merger. But like any AMS customer base, there is a contingent of unhappy YM customers, and this contingent sees the Community Brands consolidation as a distraction from the work that needs to be done to stabilize and enhance the products. And to be fair, there is a contingent of YM customers that is excited about the growth and innovation opportunities afforded by YM’s access to hundreds of millions of dollars to invest in their products.

Perhaps the greatest opportunity for YM in the short term is to expand its ancillary products and services into the new customer bases. I’m interested to see how aggressively YM Learning, YM Marketing, and YM Careers will be promoted to Abila and Aptify customers.

Industry insiders believe YM, as the lead company in this consolidation, will be challenged to balance profitability on the one hand, with guarantees of no forced migrations on the other. In particular, YM’s Digital Ignite is a direct competitor to Abila’s LMS, Freestone. And Abila’s netFORUM Pro is often considered head-to-head against YM’s AMS. In a typical consolidation, one product would be deprecated in favor of the preferred product. But as we’ve described in these analyses, this is not your typical consolidation.

INVESTMENT: Blue Sky takes investment from Freeman

In April 2017, online learning platform Blue Sky eLearn secured an investment from Freeman Digital Ventures, a sister company of event services company, Freeman. Terms of the deal were not disclosed. Click here for the press release.

Learn more about Blue Sky and Freeman on Crunchbase.

ANALYSIS Part 3 of 4: Abila joins Community Brands

In the time since the Community Brands deals were announced, I’ve spoken with senior executives at Abila, Aptify, YourMembership, and some of their competitors. I also attended the Abila Users & Developers Conference, speaking with their customers and consultants, and listened to a keynote presentation from JP Guilbault, Community Brands’ CEO.

I’ve been analyzing the implications of this deal from the standpoint of each company wrapped up in the transaction, based on the conversations I’ve had with my sources.

Today’s post is about Abila.

For background, Abila was formed out of the merger of Avectra and Sage Nonprofit Solutions in July 2013, a deal financed by private equity firm Accel-KKR. Up to that point, Sage and Avectra had little in common. Avectra offered two tiers of its AMS software (netFORUM Pro and netFORUM Enterprise), and Sage offered a suite of products for charitable organizations, the most significant of which was a fund accounting package (Sage MIP). Krista Endsley, Sage’s General Manager, was named CEO of Abila after the merger.

Significant turnover at the Avectra offices ensued soon after the merger. Virtually the entire executive suite turned over. Some industry insiders characterized the transition as rocky, and one longtime Avectra client I spoke to called it “chaos.” My sources tell me that Abila leadership, in hindsight, regretted the mass exodus of personnel.

With its round of funding from Accel-KKR, Abila went on to acquire Peach New Media, provider of an LMS platform called Freestone. With an expanding line of products, industry observers expected to see Abila take a page out of YourMembership’s playbook and make additional acquisitions; but those deals never materialized.

Abila’s CEO Endsley departed the company in February 2017 and was replaced by Craig Charlton, an Accel-KKR advisor. Her departure was coupled with rumors (substantiated by well-placed sources) that Abila had been shopping around for a buyer since 2015. The Abila deal closed one month after Charlton was hired. Some conjectured that Charlton was hired just to get a deal done, but he vigorously denies that rumor.

Abila brings a large DC-area office to Community Brands, an asset that YourMembership has lacked.

Abila’s customer base of approximately 8,000, when taken as a whole, could be described as all over the map. There are approximately 300 large association clients running netFORUM Enterprise, around a thousand netFORUM Pro clients (trending small-medium sized), about 6,000 nonprofit (not association) clients running Sage products, and around 100 Freestone clients.

The short term effects of the Community Brands deal aren’t that significant for Abila customers, in my view. Many Abila staff have been through a merger before, giving them experience to draw from, and I predict the disruption for Abila customers will be minimal. From experience, we’ve learned that the transition from one private equity firm to another gets easier with each subsequent investment.

The long term effects will be interesting to watch. Community Brands staff will be challenged with how to manage three Abila products that compete with other products in the Community Brands portfolio.

  • netFORUM Enterprise vs. Aptify
  • netFORUM Pro vs. YourMembership
  • Freestone vs. Crowd Wisdom (aka YM Learning and Digital Ignite)

Abila’s purchase price was rumored to be in the $150-$200 million range.

ReviewMyAMS & theNIRD on the Community Brands consolidation at .orgCommunity Disruption event

I’ll be appearing with Teri Carden, founder of ReviewMyAMS, at the .orgCommunity Disruption + Innovation event, April 27 in Chicago. The session, focused on the Community Brands consolidation, is being billed as a fireside chat. Teri and I will discuss the consolidation’s implications for customers, members, and the association technology landscape. We’ll also take your questions, so come armed with your list of stuff you want to know about the deal.

Only a few seats remain for this event, so register now!