Remember these guys? They basically leveraged the Tesseract OCR technology and some internal software development to create a SaaS for capturing images and data of/from forms related to tax returns. Companion is focused on the professional returns market, and we estimated it did about $3 million in business during the 2010 tax season (2009 returns.) Here’s a story we did on Companion last year after meeting CEO Ed Jennings at Harvey Spencer’s annual Capture Conference.
Jennings was targeting something like $10 million in annual revenue for this year’s tax season. We’re not sure how they made out, but we did find that the company was recently sold to Drake Software – “a leading tax preparation software vendor.” Strategically, the deal makes a lot of sense.
According to the press release, the “aacquisition accelerates Drake’s calculated move into the SaaS space.” “GruntWorx [Copanion’s product brand] allows us to rapidly expand our offerings into the cutting-edge document automation technology arena. This enables us to provide tax professionals with a true end-to-end paperless tax solution and deliver extremely high accuracy rates,” said John Sapp, Vice President of Strategic Development at Drake Software.
“Cutting-edge document automation technology arena,” — Like that description.
Aapparently Drake is privately held, so we couldn’t find any info about how much it paid for Copanion, but we reported last year that Copanion had raised at least $16 million in venture financing, including a $10.2 million round that closed just two years ago. So, we’re guessing Drake paid at least $25 million. (Does anyone have any insights into a typical multiple paid for a company just two years after taking on such a large round of financing?) If that’s the case, if certainly proves out the value of a vertical focus.