Having reorganized company management to his liking and that of investors, entrepreneur Tripp Rackley says BroadSource is ready to dial in some successful business.
“There are numerous reports out there that show companies can optimize their spending by 25 to 30 percent,” Rackley tells Local Tech Wire. “We are talking a market that runs into the billions.”
BroadSource, a four-year-old company, has developed a technology platform and a variety of services to assist companies not only reduce errors in phone bills but to prevent errors before they are made. Phone bill errors are estimated to be $50 billion a year, according to some research, and BroadSource says it can reduce mistakes by 20 percent or more.
The company already has several clients, including phone companies.
Rackley, a well-known Atlanta tech leader who took one company (nFront) public in 1999 and is a leader in the entrepreneurial community, invested some more of his own cash into BroadSource as part of a $5.7 million round that was announced on Monday.
“I put in a substantial portion,” Rackley said. “It is a meaningful portion.”
Lining up with Rackley, Noro-Moseley Partners and Harbert Venture Partners led the round. Also investing were Michael McChesney, a former executive with S1 and WebTone Technologies, Bill Scott of ITC Holding, and Said Mohammadioun, chairman of Synchrologic plus other individuals. Rackley is entrepreneur in residence at Noro-Moseley.
“We have been tracking this company for a long time,” said Alan Taetle of Noro-Moseley, who joins BroadSource’s board as part of the deal. “We have been patiently for the transformation to take place.”
Taetle and Rackley have also looked at a number of deals together in the past, Taetle said. When Rackley installed a new management group, Taetle said, “You can’t say enough about the team.”
Taetle said he also saw considerable growth opportunities for BroadSource, given the complexity of telecommunications billing, increasing competition among carriers, and executives looking to trim costs.
BroadSource will use the investment to expand its workforce plus sales and marketing efforts. It currently employs 20 people.
“This round certainly gives us plenty of capital to scale up the business,” Rackley said. People will be hired in all areas, with an emphasis on sales and marketing, he added. “Acquisitions are also possible.”
Rackley, a Georgia Tech engineering graduate, has been the driving force behind the changes at BroadSource, which had raised $2 million from angels. Rackley, who has been very active with the Technology Association of Georgia, invested in the firm last October and was named chairman last December.
But that was just the beginning of his agenda. “I had to get enough control around it,” Rackley said. “We put an entirely new organization in place between October and January.”
In March, Rackley revamped the company’s management, bringing in three executives who had worked with him at nFront. nFront was a developer of Internet banking solutions. Rackley assumed the CEO role from company co-founder Bird Blitch, who became executive vice president of product strategy. Steven Neel took over as chief operating officer, Derek Porter as chief technology officer, and Alan Powell as head of sales and business development.
Like Rackley, the three executives he hired are Georgia Tech graduates. Neel and Powell went to work for Digital Insight, which bought nFront. Porter worked with Rackley at Noro-Moseley, reviewing business plans and researching new technology.
Blitch and Andy Monik co-founded BroadSource in 2000.