.

Quentic €15M Fund-Raising Puts It In Pole Position In Continental Europe

EHS software provider, Quentic, has announced a follow-on growth capital investment of €15 million from its existing investors One Peak Partners and Morgan Stanley Expansion Capital. As recently as May 2017, the same investors pumped €22 million into the business in a Series A round. Since then, Quentic has doubled its headcount from 100 employees to 200 employees and acquired NordSafety a specialist provider of mobile apps for safety management. The vendor also rebranded from EcoIntense to Quentic reflecting the expansion of its product from environmental and sustainability functionality into a broader EHS software application. Reflecting the rapid growth of the business and investment in the product to support a broader range of EHS processes, Quentic entered into the Leaders’ Quadrant of the March 2019 Verdantix Green Quadrant for EHS software.

Quentic has made the smart decision to focus its commercial activities on continental European economies and its successful growth reflects this choice. It faces minimal competition in German-speaking markets as very few North American vendors have more than a token presence of 1 to 5 employees in Germany, Austria or Switzerland. Buyers in these markets typically require their suppliers to have a clear long-term commitment to the country and a Geschäftsführer who takes overall responsibility for the business. So travelling salesmen from US firms usually have little success. Since 2014, German software behemoth SAP has made only minimal investments in its own EHS software because the average deal size is below $500,000. And SAP recently sold off its EHS regulatory content assets to Verisk 3E. This has left the field clear for Quentic to succeed as it has the right strategy, significant growth capital and weak competitors.

In 2019, Verdantix forecasts that European firms will spend $312 million on EHS software representing 25% of the global market. Whilst this is significantly less than the $650 million that will be spent in North America it is also a market with lower levels of competition and less private equity funding. EHS software vendors headquartered in North America are following the time-honoured growth strategy of opening an office in the UK and then dispatching American, Canadian or British reps to sell into “Europe”. This is not a repeatable formula for growth and early quick wins will not translate into a stable long-term business. North American vendors need to put down deep roots in the major European economies – an expensive growth strategy but nevertheless the only way to compete with incumbents like Quentic, Red-On-Line, Enablon, Wolters Kluwer, DNV GL and EcoOnline.

EHS Blog Quentic15MFund RaisingPutsItInPolePositionInContinentalEurope