Financial Review Rich lister and tech entrepreneur, Christian Beck, recently secured a significant boost for his software businesses and unveiled his plans to revolutionize the legal sector. Beck, who was crowned EY’s entrepreneur of the year, successfully raised a remarkable $350 million from super funds. This substantial influx of capital will enable him to rapidly expand his ventures.
Although numerous private equity firms expressed interest in partnering with Beck, and there were suggestions to take his business, InfoTrack, public, the astute entrepreneur has opted for an alternative growth strategy. Instead of relying on external sources of funding, Beck has decided to leverage the advantages of cheap debt to propel his businesses forward.
InfoTrack, renowned for its comprehensive one-stop-search engine facilitating critical legal searches, and its sister company Leap Legal Software, will be the primary beneficiaries of this new injection of funds. With Beck’s strategic vision and financial backing, both ventures are poised to experience significant growth and make substantial waves in the legal industry.
Debt cheaper than ever
Mr. Beck, in an interview with The Australian Financial Review, announced a successful debt raising of $350 million for our company, marking the largest debt raising for a technology firm without private equity involvement.
When it comes to growth strategies, companies often choose to proceed cautiously by utilizing their profits, or they opt for an initial public offering to sell shares. However, we have made the decision to fund our expansion solely through debt. Although we received numerous offers from private equity firms, the current low interest rates on debt make it a more cost-effective option, with an overall interest rate of around 8 percent, compared to the considerably higher costs associated with private equity.
Rather than approaching traditional banks, we turned to super funds and institutional investors to secure the necessary funding. Goldman Sachs and JPMorgan facilitated the arrangement, involving a range of institutions across Asia, including Singapore, Hong Kong, and Australia. Notable participants include pension boards and organizations such as Perpetual and a Canadian pension fund.
Under the proposed agreement with debt investors, Mr. Beck will retain a 63 percent ownership stake. Leap Legal Software plans to acquire InfoTrack through a combination of cash and scrip, funding the acquisition with the $350 million leveraged loan.
InfoTrack, which presented its case to fund managers in early 2022 for a potential listing on the Australian Securities Exchange (ASX), offers a comprehensive search engine for legal purposes, encompassing ASIC, credit agencies, the electoral roll, and litigation services. In addition, Mr. Beck has launched LEAP, a cloud-based management system designed to enhance productivity, maintain accurate records, and ensure compliance with regulatory and tax obligations for small law firms.
Reflecting on the company’s origins, Mr. Beck mentioned his father’s law firm in Parramatta, where negotiations were underway to acquire a law search function called Lawpoint. However, the deal fell through, which ultimately turned out to be a fortunate turn of events for us. The comprehensive suite of services provided by InfoTrack essentially fulfills all the requirements for running a small law firm, leading to significant disruption within the legal industry. Today, more than half of all small law firms in Australia utilize our services.
Don’t try to make money from lawyers
Mr. Beck, hailed by the EY judging panel as a “self-made and self-taught” individual, has already amassed a fortune of $619 million, securing the 109th position in last year’s Financial Review Rich List.
Under the umbrella of Australian Technology Innovators, a collective of legal tech businesses, there has been a rapid expansion into the US and UK markets. Revenue has skyrocketed from $156 million in 2015 to $231 million in the current financial year, with a workforce of over 350 employees.
Reflecting on the achievements, Mr. Beck attributed their success to unwavering determination. “Selling into the medical and legal sectors is widely recognized as a significant challenge. My father, who happens to be a lawyer, always cautioned against pursuing monetary gains from lawyers. I made it my mission to prove him wrong,” he stated.
Kathy Gramp, Chair of the EY judging panel, praised Mr. Beck for establishing two immensely prosperous ventures from scratch. “His drive shows no signs of waning. As a self-made, self-taught serial entrepreneur, he has consistently demonstrated his ability to extract exceptional value by integrating his offerings within Australian Technology Innovators, which is poised for global expansion.”
