Ruffena Capital advised ResQ as it sought to raise finance in the form of a convertible loan.
ResQ is an outsource contact centre principally handling outbound sales calls for its clients.
Founded in 2005, it is based in Hull and opened a second call centre in Seaham, County Durham in 2016.
The company has a unique charging structure within the industry where the fixed fee is reduced and the company takes a share of the success revenue. Leading edge technology also allows the company to update its clients on sales in real time via an app. Significant investment in training and development means the company outperforms many of its competitors and it has never lost a client for operational reasons.
The market for sales based outsourcing is estimated at £270m a year, and is growing, in large part due to the repatriation of tele-marketing operations by many companies to the UK.
The need and opportunity
In 2016, ResQ needed to raise finance in order to exit a CVA and continue to invest in technology and its IT strategy. The CVA was established after its largest client suspended all tele-sales with immediate effect. This was caused by one of the client’s competitors receiving a large fine from Oftel for irregularities even though it, and ResQ, were totally compliant with telemarketing regulations. Despite the burden of the CVA repayments (£525k in 2015), ResQ traded strongly expanding its client base. It had a turnover of £12.55m and made £1m EBITDA in the year to December 2015. The exit of the CVA has enabled further expansion of the blue chip client base.
Ruffena, advised on structure and terms of the deal, helped with the documentation and curated the fund-raising process. It also sourced £300,000 of the finance required from within its own investor network with other funders providing the remaining investment.
The finance secured was in the form of a 10% Convertible Loan note.
Since fundraising completed, the company has secured a number of new clients and continues to trade strongly. Its new contact centre at Seaham has a 1,200 seat capacity. The company has the technology and systems available to handle a rapid increase in sales. It is also providing valuable employment opportunities in both Durham and Hull, where it is now the largest private sector employer.
[quote] “ResQ takes a novel approach to outsource sales and is very good at it. The continued growth of its client base is testament to this.” Dwight Makins, Ruffena Capital.