Lebanon tech startup sold for $79 million

  • Director of Partnerships Tom Scully, left, CEO Chris Forman, middle, and account manager Alison Bowen, right, stop to converse as their paths cross in the office of Appcast in Lebanon, N.H., Thursday, October 27, 2016. The company serves as a digital medium between large employers and publishers of job ads. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Valley News Business Writer
Published: 7/2/2019 1:23:47 PM

LEBANON — A 5½-year-old Upper Valley digital startup that has become a major player in helping national employers find job candidates has sold a majority stake in the company to a German media giant for $79 million.

Appcast, which employs 30 people at its headquarters in a former mill building in downtown Lebanon and was launched in 2014 by local entrepreneur Chris Forman, announced this week that Axel Springer has acquired 85% of the company in a bid to enter the lucrative market of online job postings and searches.

“We’ve been really lucky in building a suite of products and services that hit the market at the right time and lucky enough to attract a great group of people that has made us a successful company,” Forman said in an interview Wednesday. “And Axel Springer is a company that represents business ethics that are at home in Lebanon, N.H. They believe in our business and will continue to invest in it.”

Appcast operates in the business of computer-driven online job posts and job searches by placing, through algorithms, recruitment ads on websites, job boards and other internet media that target people with specific skill sets on behalf of employers. Known as “programmatic advertising,” Appcast says that in the company’s short history it has “driven” more than 2.5 billion online job ads that generated 650 million applications for those jobs.

To fill its own job openings, the company has prioritized hiring recent college graduates who grew up or attended high school in the Upper Valley — half of the 30 employees at its Lebanon headquarters attended either Lebanon High School or Kimball Union Academy — even if they don’t have a tech background. Appcast has a total of just under 100 employees at four locations in Lebanon, Boston; Canada; and Minsk, Belarus; where its engineering team is based.

Axel Springer owns a host of media properties, including Germany’s Die Welt newspaper, the European edition of the online news site Politico and the U.S. business news site Business Insider, to name a few. The company in recent years has been repositioning itself aggressively from an old line print publisher to a digital media, data and marketing company that owns the U.K. classified site TotalJobs and European jobs portal StepStone.

“We have wanted to enter the U.S. job classifieds market with StepStone group for quite some time,” Andreas Wiele, president of classifieds media at Axel Springer, said in a statement. He called Appcast a “very fast-growing company” and “perfect investment for us” that will enable Axel Springer to become “the leading international digital job classifieds provider.”

Appcast’s rocket-like growth is not atypical among hot tech startups: Revenues grew from $350,000 during its first year in business in 2014 to $8 million in 2016, the most recent year the then-private company disclosed results. Forman said he is barred from discussing financial performance now that Appcast is part of a public company, but he said Appcast became profitable in 2018 and revenues are “materially more” than they were three years ago.

Customers who use Appcast’s platform to recruit employees represent a roll call of names among American corporations such as FedEx, Farmers Insurance, Mutual of Omaha, AccentCare, Postmates and Instacart. The customers pay Appcast only when a job seeker responds to an recruitment ad and submits a application, known as “pay-per-applicant.”

The remaining 15% interest in Appcast that Axel Springer did not acquire remains owned by Forman and Appcast employees, Forman said, indicating that the company would be valued at $93 million had Axel Springer acquired all the shares.

Appcast funded its growth with a total of $12 million in capital raised from Baird Capital, Point Judith Capital and Silicon Valley Bank. Forman said those seed investors have now exited their investment with the sale to Axel Springer.

Although transfer of control in a startup frequently signals that the founder will not continue under the new corporate owners, Forman said he will remain president of the company.

“I’m not going anywhere,” he said.

Forman, a Meriden resident and former chairman of the Plainfield School Board, attended Colby College in Maine and began his career as a journalist with Campaigns & Elections magazine before segueing into a marketing communications firm. He later worked for Centricut, which makes nozzles and accessories for laser cutting equipment and was acquired by Hypertherm, and afterward joined AIRS, a Wilder recruitment training company, where he was CEO before the company was sold to HR giant ADP.

Forman moved to the Upper Valley when his wife, Dr. Angela Toms, a family physician with White River Family Physician in White River Junction, attended medical school at Dartmouth. They have four children and live on a “small family farm with cows, pigs, sheep and chickens.”

John Lippman can be reached at j lippman@vnews.com.

Corrections

Appcast says the company has driven more than 2.5 billion online job ads that generated 650 million applications for those jobs. The number of applications was incorrect in an earlier version of this story.

This story has been updated to correct the name of Axel Springer.




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