Algomi Case Study
Rob Howes, COO of Algomi, describes how the expertise of Technology Law Alliance has enabled the transformation of the company from a one client start-up into a structured and professional business.
Financial services company Algomi was spun out of CapXD in June 2012. It subsequently attracted investment from Lakestar, an investor in success stories such as Facebook, Skype and Spotify. It has been a whirlwind three years for the management team of Rob Howes and Usman Khan.
Algomi COO Howes is thankful for the commercial and corporate acumen of Technology Law Alliance (TLA), which has enabled two friends, who were working for investment bank UBS just four years ago, to transform their company from a one-client start-up to a structured and professional business.
The team at TLA has advised on everything from the investment deal and the corporate restructuring to the HR issues associated with forming the new entity and the renegotiation of a crucial commercial contract that enabled Algomi to grow from vision to reality.
“It’s been a good journey with TLA,” smiles Howes. “These were big changes that required a pretty big shift of thinking and approach. Having trust and confidence in TLA ultimately made it about as smooth as these things can go.”
Two years ago, Howes and Khan realised it was probably time to stop accepting their clients’ contracts (with a few modifications) and get some proper legal advice.
“We couldn’t afford to continue with that sort of approach,” states Howes. “TLA helped us build a mature legal infrastructure and we have been using them for all manner of legal arrangements since then. Everything goes through TLA now.”
CapXD was founded in 2009 and was fortunate to land a massive contract with a large investment bank just one year in. It signed an exclusive deal with the bank for the use of its innovative platform, which allows anonymous client-to-client bond trading. The exclusive terms meant the deal was lucrative but restrictive.
“The industry assumed we were a workshop for that one company. We realised the need to stand independently,” explains Howes. “We were ready for a drastic change - to reinvent the product and the company.”
TLA partner Stephen Ollerenshaw renegotiated the contract. It was a crucial deal that gave CapXD the freedom to develop into a multi-client company with a new brand - Algomi.
When it came to founding the new company, Howes had no hesitation in turning to TLA for the corporate advice necessary to establish it.
“The advice from TLA was that if you do it properly then it opens the door for future investment,” says Howes.
And so it turned out. TLA advised on the articles of association, a new shareholders agreement and ultimately, on the deal that brought Lakestar in.
“What was really important was that they had the experience to get the balance right,” says Howes. “The natural inclination is to push for everything in your favour but they had the restraint, patience and ultimately, the experience to recognise that what the investor is asking for is not unreasonable.”
Algomi, an innovative financial service tech company, is now backed by the type of investor that specialises in launching innovative tech companies. It has a new chairman and CEO and TLA continues to advise it on whatever needs doing.
“What is really important is that we have built up a trust with TLA,” concludes Howes. “They are genuinely looking after our interests.”