Entrepreneur James Richmond never considered switching to a SaaS-based business until his chairman Bryan Sergeant suggested it in 2017.
Richmond and his co-founder Ben Clifford started the company in 2003 and admit they were largely running Nevaya as a lifestyle business until the pivot.
“Bryan was our first chairman and he helped us grow up a bit,” he recalls to TechBlast. “We’d never held monthly board meetings or produced management accounts before he joined.
“He asked if we wanted to look at pivoting and becoming a SaaS-based business because you could build a lot of value very quickly. He said we could focus our expertise on the software and take it to a global market rather than just be a UK business.
“We were a bit naïve but we had bigger ambitions so it wasn’t a hard decision.
“With SaaS you have to invest very heavily in sales and marketing before the recurring revenues catch up with themselves. It was nerve-wracking.
“At the time we were doing £2 million turnover with £400,000 profit and we reinvested all the profits into creating a SaaS-based business.”
Launching a startup
Nevaya’s technology now serves hundreds of hotels in over 30 countries around the world.
It’s a far cry from when the two schoolfriends went into business together after leaving university.
Their first business was called Online Bookings but rebranded as Hotel Broadband.
“We realised that WiFi was really taking off,” he says. “In all honesty we were getting to the point when we thought we were going to have to get a proper job.
“We weren’t really making any money. Then, through sheer persistence, we secured our first deal for £20,000, which saved us.
“It was with the Assemblies of God, which was a bible college when they needed to provide WiFi for their inhouse students. That gave us some cash to carry on.”
They grew the Hotel Broadband side of the business to a turnover of a couple of million pounds and eight staff before rebranding as Nevaya as they switched their focus on providing a broader range of guest experience services.
“We want to help hoteliers offer their guests the best digital experience,” he says. “One of the biggest drivers in our market is Netflix and other streamed content.
“People are turning their backs on linear TV and by using our services hotel guests can easily and securely watch that streamed content on the TV.”
The decision to move to a SaaS-based model coincided with the beginning of COVID, which decimated the hotel industry.
“It was a worrying and stressful time,” admits Richmond. “We held daily board meetings to consider what we were going to do next. There was a genuine concern that there wouldn’t be a business left.”
A key breakthrough came in 2020 when Nevaya began a major partnership with Netherlands-based hotel developer, investor and hotel chain citizenM.
“That gave us something to focus on,” recalls Richmond. “They believed in the future of hospitality.”
Today the company employs 15 people and works with other hotel giants including Accor and IHG (InterContinental Hotels Group).
During the pandemic, the company – based in Blunsdon near Swindon – has rolled out its software into tens of thousands of rooms in over 30 countries.
Does he have regrets about becoming a SaaS business?
“If we’d known how hard becoming a SaaS-based business would be, would we have done it?” he asks. “Probably not, but looking back it absolutely was the right decision.
“There’s probably been more enterprise value creation in the last 12 months than the preceding 17 or 18 years. It’s given us a lot to reflect on.”