The Credit Junction is proud to partner with great businesses across the country. Hear from Mark Casey, CEO of Apcela, to learn about how the company has grown since its inception in 2005, and how The Credit Junction has helped along the way. Click here to hear the full audio of the interview.
Founded in 2005, Apcela is an industry leader that provides its global customer base with access to cutting-edge network technologies and high-performance applications.
Apcela transforms enterprise IT networking to provide network-less networking and infrastructure-less IT solutions that interconnect top global datacenters and optimize application performance for interconnected devices.
Learn more at https://www.apcela.com.
TCJ: Tell us a bit about Apcela and the products and services you offer to your clients.
MC: When we started our relationship with The Credit Junction, our company was called CFN Services and we were largely operating in niche capital markets providing very high-performance networks and application delivery services to securities trading firms around high-frequency trading. It’s a niche market, we were bootstrapped at the time, but we were in the process of evolving from that niche. Our challenge and our opportunity was to expand into that much larger market space – in the capital markets, our addressable market was fairly limited and as we moved into enterprise, it became highly unlimited. But there were a number of challenges in terms of the amount of capital it takes to market and sell, not to mention the physical expansion that we needed to provide to the business and our physical IT infrastructure platforms. We had expanded from operating in about 35 markets globally to 185 markets globally, which obviously put pressure on our working capital.
At the time, we had been traditionally bank financed, with largely fully-amortizing loans, and I think that The Credit Junction was a good fit at a good time for us as we made that evolution.
TCJ: You had a prior bank financing relationship, but you needed growth financing to move forward. What were you looking for in a financing partner?
MC: In the maturity of the last iteration of this business, which was an evolution – there’s a lot of talk about companies pivoting today, but this certainly wasn’t a pivot, it was an expansion, because we still had those great customers in capital markets. But, we needed to start investing more in growth. That was both the physical growth of the assets that underlie our platform as well as the sales and marketing momentum that we needed to capture and market to customers in a much broader enterprise market.
At the time, we had traditional bank financing credit lines and bank term debt, all fully-amortizing, and so it was excellent to be able to find a partner that would give us a facility that we could just service the interest on, knowing that we’d be growing and linking that to our accounts receivable base as the primary asset. I know it’s ultimately linked to all of our assets, but that was an excellent fit, and as you know, because it was the promise under which you launched The Credit Junction, there is a gap in that market. It’s easy to go out and get a $100,000 A/R line, but it’s not easy to go out and get a $500,000 or $1,000,000 line.
TCJ: How did you make the decision to move from a bank line of credit to The Credit Junction?
MC: The interest costs are certainly a little bit higher than what we had in bank financing, but as a growth business, the out-the-door interest cost isn’t everything. It’s really all about the out-the-door cash flow cost, and so when you take the amortization out of the bank debt, it becomes very competitive.
TCJ: What have you found to be helpful about the process with TCJ early on and even today?
MC: Certainly the size of the organization fits well with us – an organization that is a growth-oriented, entrepreneurial company looking to press the boundaries of the box. Being able to work with Jim [Chief Credit Officer at The Credit Junction] early on and get you guys comfortable with understanding our legacy business and where we were going, and the kind of investments we needed to make for that.
Having a partner where the senior level folks in the firm are engaged and can have a fundamental understanding of what we are trying to do, can get buy-in to it, and can get behind the company in the underwriting process is great. Part of your secret sauce is being able to better manage the flow of information on a real-time basis.
TCJ: How would you describe your experience with our technology and portal?
MC: I think it has been pretty seamless for us. It doesn’t really require a super heavy lift of reporting. Obviously, that’s one of the challenges with capital in general, whether its debt or equity – the overhead of maintaining that capital structure. In a debt relationship, there’s certainly a lot of reporting around that. In an equity relationship, there’s a lot of governance and other things around it. On the debt side, being able to streamline that reporting so that it has as minimal as possible of an impact on the financial operating team is key, and I think TCJ has done a nice job of building that out.
TCJ: Would you recommend The Credit Junction as a financing partner?
MC: Absolutely. I think for the right type of business, a growth business that is pursuing some kind of scale.
I think it’s a great fit for an equity backed company, but it was also a great fit for us because we weren’t equity sponsored at the time. There’s a pretty well-established debt market for equity sponsored companies, but there’s a much less established market for non-equity-sponsored companies. A non-equity-sponsored company that might be thinking about equity sponsorship but isn’t there yet, TCJ is a great fit. Again, it was a great fit for us.
TCJ: Were we responsive to your growth needs as a business?
MC: You’ve been very responsive. As our business has matured, you have been increasingly flexible and willing to push the boundaries of the box. We appreciate that, and that’s what makes for a good partnership. It makes us feel loyal towards your business and the way you guys have helped us. We are excited about the facility we have with you and are looking forward to growing it and continuing to build a relationship.
About Mark Casey
Apcela’s President and CEO, Mark is a progressive leader intensely focused on leveraging emerging technologies and his deep knowledge of the global telecom and IT markets to deliver top results for clients, associates and stakeholders.
Mark’s experience and reputation is built on a successful track record of over 25 years in the communications industry delivering results for industry heavyweights including AT&T and Verizon.
Now leading Apcela, widely recognized as one of the fastest growing technology firms in North America, Mark and his team specialize in developing high-performance solutions for globally distributed, real-time, mission-critical applications.
Mark holds a BBA from the University of Massachusetts at Amherst and an MBA from American University.
Interview conducted by Mac Trivedi, Head of Financial Partnerships at The Credit Junction.