More than 20 years after Eric Mosley co-founded software business, Workhuman, the Dublin-headquartered firm has just achieved a valuation of over $1 billion.
“I’m starting to get used to crises,” Mosley told CNBC via telephone, reflecting on his time leading the company through three major market downturns: The dotcom bubble in 2000, the global financial crisis in 2008-2009 and the ongoing coronavirus pandemic.
Workhuman is a cloud-based workplace performance management platform and provides software solutions that allow colleagues to recognize each other’s work.
It announced on Tuesday that the company was now valued at $1.2 billion, earning “unicorn” status — the title given to private companies which are valued at over $1 billion.
In fact, it is the first, and currently only, unicorn based in Ireland, according to market intelligence platform CB Insights. It has dual headquarters in the capital city of Dublin and Framingham, Massachusetts. Software company Intercom has also been dubbed an Irish unicorn, as its products are said to be designed and developed in Dublin, but it doesn’t make CB Insight’s list as its headquarters are in San Francisco.
Workhuman’s latest valuation is thanks to a $120 million investment by London-based investor Intermediate Capital Group, representing a 10% minority stake in the company.
This comes at a challenging time for companies seeking investment due to the economic downturn caused by the coronavirus crisis.
Mosley co-founded Workhuman, known as Globoforce until last year, in 1999 shortly before the stock market crash of 2000 hit.
He said that while it was tough to get investors on board at the time, Workhuman managed to secure some funding from angel investors. These are high net worth individuals who typically back small start-ups and entrepreneurs.
“When I look back on it, I think … they were (either) very courageous or reckless with their money to invest in a couple of people who really didn’t know what they were doing,” Mosley said.
Not having any previous entrepreneurial experience, he said it was a case of throwing “every minute of every day at the challenge and claw your way to your first customer and once you get your first customer, you use that leverage to get your second customer.”
Fear and despair
Mosley said there had been greater demand for Workhuman’s software during the coronavirus lockdown, as employers and workers have had to increasingly rely on virtual means to manage and recognize performance.
The company’s revenues were up 40% in April this year on the same month in 2019, with total turnover for last year at $585 million.
Mosley said this was evidence that businesses were “doubling down” on ensuring that employees felt recognized for their work during a period of “fear” and “despair.”
“Never underestimate the worry that your employees are suffering from,” he said. “And if you can identify with that and also express that you are human too, you find that the employees will respond in kind.”
Workhuman had looked at listing on the stock market in 2014 but Mosley said the market had turned quite negative for technology companies, so it held off going public.
He said that being profitable and having a positive cashflow meant the business hadn’t felt the pressure to list in order to raise money.
But the exit of around 95% of those original smaller angel investors through ICG’s investment made the company more “efficient” should it choose to go public.
“The smaller the cap table of shareholders, the more efficient you are to do a transaction and certainly an IPO (initial public offering) because it’s a lot of company secretarial work,” he explained.
Mosley added that Workhuman would likely IPO and while there was no “immediate timeframe,” the company might start the process next year.
‘Learn to sell’
Mosley’s biggest advice to any entrepreneur was to learn how to sell as many founders come from an engineering or product development background and might not have that experience.
“If you’re starting up a company, don’t delegate it or hire a salesperson and expect the salesperson to do it for you from the start,” he said. “You have to be able to look customers and prospects in the eye and deliver sales.”
It is when you grow and gain credibility as a company that you can hire those people to delegate to but learning it yourself first is the only way to know “what good looks like,” Mosley added.