Wall Street observers marveled that it felt like 1999 for a few hours on July 16, a sweltering day in New York City that signaled the start of a heat wave.That day Qliktech, which pioneered a disruptive new approach to business intelligence software, launched an initial public offering of stock on the NASDAQ and saw its stock shoot up by more than 30 % after the opening bell, before settling down for a 28 % gain, making it one of the hottest tech IPOs of the year in the U.S.
The company was valued at $770 million when it listed and had a valuation of $1.5 billion by late November.
Chalk it up to European software innovation and business acumen. It was Bjorn Berg, one of the two Swedish founders of the 17-year-old company that had the original vision. Another Swede, Jonas Nachmanson, has been in charge of innovating Qliktech’s technology since 1996, developing tools to help companies quickly and easily access and interpret information in corporate databases on desktop computers and more recently on high-end mobile devices like the iPhone. And without Swede Mans Hultman, who saved the company from bankruptcy and led it to profitability, there would be no company.
Qliktech, which was named a World Economic Forum Technology Pioneer in 2008, is now considered a global player in business intelligence software with some 16,000 customers, including small and medium sized businesses and Fortune 500 companies. It is projecting 2010 revenues of $211 million.
Qliktech’s story negates some common wisdom about Europe: European companies are mostly copycats, they don’t scale and they need to hire American executives to drive the business. But the company’s history reinforces some others: European tech companies – in sectors such as software – believe they need to move their headquarters to the U.S. in order to expand globally. And while Betfair provides a refreshing exception Europe still hasn’t managed to make its stock markets attractive to European start-ups.
Nasdaq remains the stock market of reference, which means value created here creates wealth elsewhere, negatively impacting the future of Europe. “Going public on Nasdaq was the right thing to do for shareholders but the wrong thing for Sweden,” says Hultman, Qliktech’s former CEO and Chairman. He chose to remain in his native country and is currently being sought out as an advisor on how to improve the environment in Sweden for young companies who want to list their companies publicly.
Hultman is also now advising and helping seed a new generation of young European companies. And the David versus Goliath story behind the rise of Qliktech is itself expected to serve as an inspiration to start-ups on the Continent who need more good role models. Its success is symbolic of the maturation of Europe’s tech sector, which is starting to produce a greater number of companies with billion dollar valuations and the chops to become global players.
Investor Bruce Golden, a partner at London-based Accel Partners, calls Qliktech the best software company to come out of Europe since SAP and Business Objects. “We were excited about Qliktech from the moment we first met with them because they fully reflected our views on the consumerization of enterprise software, meaning that business software had to be dramatically easier to use,” says Golden, who serves as Qliktech’s Chairman of the Board.
Qliktech originally focused on search and visualization but its technology also hit a sweet spot: helping companies to more easily access key data and cut the time to install the technology from months and years to weeks or even days.
After a friend mentioned the innovation during a sailing trip Hultman tried out the technology and was so impressed he quit his day job and invested in Qliktech, along with a group of friends.
But as many European companies learn the hard way strong technology does not automatically translate into strong business. Hultman stepped in as CEO in 2000 to help out. At the time the company was in the red and had only one sales guy, who had already resigned.
Hultman says he made the decision to have the company focus uniquely on business intelligence software and enter the market by targeting mid-sized Swedish manufacturing companies as clients. The client list grew from 6 to 200 within a twelve-month period. By 2004 the company was in solid financial shape, with revenues of 60 million Swedish kronor, and went looking for international investors. London-based Accel Partners and Jerusalem Venture Partners invested $12.5 million.
Qliktech could have raised that kind of venture capital from Swedish investors but it was looking for expertise in addition to money, says Hultman. “Suddenly we had a board that shared our visions of the company and the active support of people who had been there and done it themselves”, he says. “We wanted to run and they gave us our running shoes.”
The company moved its headquarters to Radnor, Pennsylvania in 2004. That year it grew revenues 65 percent to 100 million Swedish kroners (about $13 million). Four year later it generated revenues of $118 million. This year it will roughly double that figure.
Qliktech has thrived by first targeting small business customers that were below the radar of business intelligence software companies like Business Objects and Cognos. Then it began to cut into their businesses and today it considers IBM, SAP, Oracle and Microsoft as competitors.
Qliktech’s original technology innovation was to rethink data extraction by attaching it to RAM memory, making it easier and quicker to find information and Moore’s law has been on the company’s side, says Nachmanson, the company’s long-time chief technology officer. The technology has constantly evolved and is now available not just on the desktop but via the iPhone and Android phones, allowing executives to access the corporate dashboard while on the road, to check information such as revenue reports and forecasts.
Lars Bjork, a Swede who relocated to the US, took over as Qliktech’s chief executive in late 2007. He declined to be interviewed for this article because the company issued a secondary offering in November and is now in a silent period.
Although Hultman no longer plays an active role at Qliktech he says there is a good reason why the company continues to earn the admiration of both clients and investors. “There is a lot of growth left in the company because the competition is still really, really poor,” he says.
This story appeared in a print publication Informilo produced in partnership with Raconteur Media, which was distributed at Le Web in Paris December 8 and 9. The print publication is a beta version of a quarterly on innovation, entrepreneurship and venture capital that Informilo and Raconteur Media plan to produce in the Times in 2011.