Voices.com: Strategic planning leads to amazing growth journey
Voices.com is the largest online marketplace and top destination for voice-over actors in the world.
Founded in 2005 by David and Stephanie Ciccarelli, the company has grown by matching ad agencies, video producers and tech companies with voice actors that fit their needs.
Comprised of half a million users in 160 countries, its website records about two million unique visitors annually and has enabled over 300,000 transactions to date, most of them from outside of Canada.
Clients are either charged a one-time fee that is a percentage of the value of the contract for small projects, or a professional service fee for larger projects. Voices.com also charges actors a nominal fee to have their profile on the site.
Voices.com has played an important role in the revitalization of the London, Ontario business community, where it employs over 120 people. David and Stephanie have spent much time promoting the region to the players in the new economy.
Growth without profits
Mark Lunick of BDC Capital has tracked this company from its beginnings, with BDC giving the company its term loan 10 years ago. By 2015, the company was growing rapidly but needed resources to meet its sales targets. Other challenges Voices.com faced included a financing round with a tight limit and the inability to raise the amount of capital the company had planned.
After BDC Capital provided quasi-equity financing, Mark Lunick suggested that Voices.com consider working with the Growth Driver Program (GDP) to help address the challenges.
The GDP is a two-year program where experienced senior executives and former entrepreneurs support high-growth firms to develop a growth strategy, scale to their full potential and support the development of the entrepreneur as a leader.
3 areas of improvement were identified
The GDP team began with an initial investigation and assessment of the company’s current situation and readiness for scaling. This included extensive workshops with the CEO and the management team, as well as an industry scan.
From this initial audit, three areas of concern were identified.
Voices.com was growing rapidly, but this was happening at the cost of profitability.
While the company had transitioned from an entrepreneur led and managed company to one with a management team, BDC focused on helping the collective team elevate their game.
The last round of financing had infused fresh capital in the business, but these resources were not sufficient for long-term growth in a competitive space.
An action plan was created
Working hand-in-hand with the leadership team, we collectively zeroed in on the following changes to the business.
Restructuring the professional services department
A full review of the process flow of the professional services unit was conducted. We identified a risk in expending too much energy on large projects before the client commits to the purchase.
Critical decisions regarding the structure of this business unit were made, the department was right-sized and the unit returned to profitability within a few months.
The pricing methodology was modified following a re-examination of the opportunity to further disrupt the industry, as well as a review of the business model and the value chain.
Important leadership changes were carried out and the leadership team was broadened to include human resources. We focused on supporting the CEO’s leadership development.
Significant market research, brainstorming and a change in perspective, resulted in the agreement that unionized performing artists, a major segment of the voice talent market, was not being served by any online marketplace technology.
The company’s leadership team focused on how they could make inroads in this segment, identifying an established player in the field as a platform for market entry.
Supporting the next round of financing
The increased revenues and profitability, and the establishment of a clear growth strategy made Voices.com much more attractive to the private equity market.
The result was a US$18 million investment from San Francisco-based Morgan Stanley Expansion Capital and the acquisition of a well-established existing player in the space, Voicebank.net.
The BDC team helped the Voices.com executive team prepare for the due diligence phase of the financing. Morgan Stanley called the Voices.com team the “most prepared company they have ever encountered.” This feedback came after we worked with the leadership team, preparing them for the meetings.
With the acquisition, Voices.com was able to add access to talent agents and their unionized Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) members, further solidifying the company’s position as the world’s top destination for voice-over talent. Within a year of the acquisition, the number of producers using the platform had increased significantly.
However, the most incredible impact of this project was the magnitude of the increase in Voices.com’s enterprise valuation. Thanks to a compelling growth strategy, including the acquisition of a major player, equity value was multiplied within only 13 months of starting the GDP program.
This significant appreciation in valuation not only benefited the company so it could have access to more funding, but it also minimized dilution to the shareholders.
Voices.com now has the financial resources to continue to grow and consolidate the industry.
Results of the program
The “Voices.com’s Growth Journey” project has addressed the objectives set out by both the client and the delivery team.
In September 2017, Voices.com was ranked in the top 100 of the PROFIT 500 ranking of Canada’s fastest-growing companies. It reported a five-year revenue growth of 1,166% and ranked #61 on the list of 500.
In November 2017, Voices.com was recognized as one of the fastest-growing technology companies in North America by appearing on both the 2017 Deloitte Technology Fast 50 and Deloitte Technology Fast 500.
A continuing journey
Voices.com’s leadership team and BDC’s GDP advisors are working together to figure out how to convert the remaining producers who use the “traditional” casting process.
Bringing them online would further cement Voices.com as the trendsetter and market leader. There would also be an opportunity to maximize service offerings to the clients (producers) and control pricing in the market. Planning is underway for this next step in the strategic process.