RIB acquires a stake in the UK AEC software reseller Cadline and plans ten-fold growth of its MTWO cloud platform in 2019.
RIB Software, the Stuttgart, Germany-based provider of enterprise software for the building, construction and real estate industries, has announced an investment in the UK and Holland-based software reseller Cadline to grow the market for RIB’s MTWO software platform. The deal was executed through A2K, a 60% subsidiary of RIB with extensive building and construction knowledge, now actively selling MTWO in Australia/New Zealand.
In late 2018, RIB’s COO and executive board member Mads Bording told Extranet Evolution (post) about the company’s plans to expand into the UK. And, having partnered with Microsoft to offer an Azure-hosted option for its iTWO software (MTWO), it has ambitious plans to grow its cloud-hosted userbase significantly.
Cadline is a well-established reseller of software products to the building and construction market in the UK and Netherlands with over 30 years of experience in the field and over 30,000 users. An Autodesk Platinum partner, the company is based in Staines west of London with six other offices throughout the UK and a wholly-owned subsidiary in Utrecht, Netherlands, and has a turnover of £29 million (c. US$37 million or €33m). RIB says Cadline’s industry knowledge across the MTWO market space will help it to promote MTWO into the target market of building, construction and real estate industries. Cadline has a very strong sales focus with 35 of their 100 employees dedicated to sales. Additional sales staff will be employed specifically as part of a separate, specialised MTWO team (to be created).
As part of RIB’s rapid MTWO deployment strategy, and utilising A2K’s industry knowledge, Cadline will be able to focus solely on selling the MTWO solution as RIB’s previous 100% acquisition of SaaSplaza, a company dedicated to delivery of solutions on the MTWO platform, will provide the platform for the MTWO delivery without needing to train Cadline staff in SaaS delivery. This strategy will be used for multiple additional acquisitions and investments to ensure the MTWO sales targets are met in the minimum time necessary.
20% investment in Cadline
The investment in Cadline is the first deal under RIB’s 60% subsidiary A2K and expands RIB Group’s market knowledge in Europe significantly. As part of the push for MTWO market spread it provides RIB with another highly skilled reseller in the construction space and follows RIB’s previous investments in the area to build up the world’s first vertical cloud for the construction and real estate industries.
RIB has acquired 20% of the shares via its 60% subsidiary A2K at a total cost of £2.4 million (c. US$3.1m or €2.8m). As part of the agreement, Cadline will invest more than £0.95m (c. US$1.23m or €1.1m) of its own funds to promote the spread of the MTWO technology over the next three years. Together, RIB, A2K and Cadline are targeting to win 10,000 MTWO users by 2020 in a short-term manner and 100,000 MTWO users in the mid-term.
Richard Robertson, Cadline’s business development director, says:
“We are excited to work together with A2K and the RIB team to continue to rapidly grow current solution sales and additionally to deliver one of the most advanced and future oriented cloud/AI based enterprise ERP solution to the real estate and construction industries in an age that requires construction leaders to develop and expand a mindset for digitisation. We believe that with MTWO technology we can provide our customers with a solution, which is easy to implement and use to push the digitization and transformation of a whole industry.”
Paul Laycock, global CEO of A2K and chief global advisor to the RIB Partner Investment Program, says:
“A2K’s investment in Cadline supported by RIB will enable us to expand our market position into Europe. Through the bundling of competencies with the RIB SaaSplaza team, rapid market penetration is made possible. MTWO is targeting to win 2 Million USERS worldwide in the midterm and is today one of the most advanced cloud-based enterprise solutions in the AEC and EPC Industry. We will continue to focus on executing our announced investment strategy and integrate MSP partners in other areas of the world to offer the MTWO platform to more construction and real estate companies to offer access to our iTWO Technology to at least 80% of the global market.”
This investment follows RIB’s previous investments in ICS located in the U.S., A2K headquartered in Australia, SaaSplaza located in the Netherlands and Levtech headquartered in India and UAE. The MTWO initiative with Microsoft aims to build up the world’s first vertical cloud for the construction and real estate industries.
RIB cloud growth
RIB Group grew 26% in 2018, boosted by its SaaS operations (post), and in a follow-up announcement and trading update for Q1 of 2019, RIB said group revenues grew by 47.6% to €46.5m; recurring revenues (ARR) grew 67.8% to €25.5m, with cloud revenues up 190.5% to €12.2 million (previous year: €4.2 million). The number of MTWO/iTWO 4.0 platform users grows by 181.6% to 8,447 users. This, RIB said, “exceeded our expectations”, continuing:
“For 2019, we plan to increase the total number of users from 3,000 in 2018 to 30,000 in 2019, to reach 100,000 in 2020, as already announced. The users will be acquired partly through new customer acquisition and partly through the migration of 500,000 existing users from other software applications within our Group.”