Why an Austin software maker that’s been profitable for almost 24 years just raised $25 million

Source: Austin Business Journal

By Mike Cronin  –  Staff Writer, Austin Business Journal

Oct 12, 2017, 2:55pm CDT

A $25 million investment in Austin-based Baxter Planning Systems Inc. by Polaris Partners LP, a venture capital firm headquartered in Boston, will enable the company to expand in size and enter a new market.

Baxter Planning Systems software helps companies manage inventory in several ways, including “forecasting stock values and generating supply orders to make sure parts are available in the areas where they’re needed,” said Greg Baxter said, founder and CEO.

Clients include Finland-based Nokia Corp. (NYSE: NOK), New York-based Verizon Communications Inc. (NYSE: VZ) and Japan-based Fujitsu Ltd. Baxter’s competitors include Massachusetts-based PTC (Nasdaq: PTC) and Germany-based SAP SE (NYSE: SAP).

“We’ve been a 100-percent software-as-a-service company and now we’re moving into a new space by offering customers planning-as-a-service,” Baxter said. “We’ll be able to automate the majority of planning processes, add our supply-chain expertise, and provide the most value for our customers.”

A funding first

Except for an angel investment roughly 15 years ago, this round of funding is the company’s first, Baxter said.

The money will be used to increase Baxter Planning Systems’ sales and marketing activities, grow its international operations and enhance product development, Baxter said.

“Greg and his team have built a wonderful business that is an ideal fit for our later stage practice: a founder-led, emerging category leader with a strong track record of profitable growth,” said Bryce Youngren, Polaris Partners managing partner, in a statement.

Dan Lombard of Polaris Partners will join the Baxter Planning Systems board.

In addition, Polaris Partners executives recruited three other Baxter investors to join the board: Jim Martell and Sandy Smith, transportation experts who bring a combined 70 years of supply chain and logistics experience, and Bob Ranaldi, a 25-year sales veteran.

The company has other international offices in Australia, England, India, Portugal and Spain. Baxter intends to establish “a larger presence” and hubs in each country, he said.

About 45 of the company’s 55 total employees work in the Austin headquarters, Baxter said. He projects hiring roughly 10 more people during the next 12 months. Positions will be in sales and marketing, supply-chain expertise and Java software development.

Profitable almost since it launched in 1993, Baxter Planning Systems generates annual revenue “in the 10 figures,” Baxter said.

The possibility of a merger or acquisition “would trigger the next round of funding,” he said.

 

Baxter Planning Systems Receives Strategic Growth Investment from Polaris Partners

AUSTIN, TX— (Marketwired – October 11, 2017) – Baxter Planning Systems, a supply chain SaaS company, has received a growth investment from Polaris Partners. Baxter’s software platform, Prophet, helps OEMs optimize their aftermarket operations by significantly reducing inventory and transport costs while improving service levels.

Greg Baxter, Founder and Chief Executive Officer of Baxter, said “We are thrilled to partner with Polaris to help us capitalize on this exciting time in our market and the company’s history. In this increasingly competitive global service environment, OEMs and third party service providers have a heightened focus on their post-sales service operations as a critical source of profitable growth and maximizing customer lifetime value. Partnering with Polaris will enable us to drive market-leading innovation while maintaining our relentless commitment to customer success.”

Baxter’s customers are global organizations that service mission-critical capital equipment. Given the time-sensitive and complex nature of their aftermarket supply chain, Baxter’s customers encounter substantial complexity trying to optimize and execute required service levels without bloating inventory, shipping, or fixed distribution footprint costs.

“The Baxter team has a deep commitment to solving the unique pain points of aftermarket planning,” said Dan Lombard, Partner at Polaris Partners. “The company’s exceptional history of customer retention speaks to its domain expertise, the compelling ROI generated by its clients, and its differentiated combination of software and planning-as-a-service.”

Bryce Youngren, Managing Partner at Polaris Partners, noted “Greg and his team have built a wonderful business that is an ideal fit for our later stage practice: a founder-led, emerging category leader with a strong track record of profitable growth. We are excited to support the next phase of growth and success by expanding Baxter’s capabilities into new markets, products, and geographies.” The Baxter transaction represents continued momentum for the later stage investment practice of Polaris.

Both Youngren and Lombard will serve on the Baxter’s Board of Directors. Additionally, Polaris recruited three senior industry executives — all of whom personally invested — to join the Baxter Board of Directors and work closely with management. Jim Martell and Sandy Smith, longstanding transportation experts, bring a combined 70 years of supply chain and logistics expertise. Bob Ranaldi, who formerly served as EVP of Worldwide Sales at PTC, brings decades of sales and marketing leadership and global OEM relationships.

About Baxter Planning Systems

Founded by Greg and Audrey Baxter, Baxter Planning Systems is a leading provider of aftermarket supply chain software. Baxter’s differentiated combination of a SaaS platform featuring planning-as-a-service allows OEMs to deliver exceptional post-sales customer service and experience while increasing profitability and cash flow. Headquartered in Austin, Texas, Baxter has been on SupplyChainBrain’s “List of 100 Great Supply Chain Partners” for 13 consecutive years, and was recently awarded their 3rd consecutive “Best Places to Work in Austin” recognition. For more information, visit www.baxterplanning.com.

About Polaris Partners

Polaris Partners invests in exceptional technology and healthcare companies across all stages of their life cycles. With offices in Boston, San Francisco, and Dublin, we partner globally with an unparalleled network of entrepreneurs, top scientists and emerging innovators who are making significant contributions in their fields and improving the way in which we live and work. For more information, visit www.polarispartners.com.