[UPDATE, April 19, 2017: Deem redesigned and rebranded its software suite as ‘Work Fource.’]
[UPDATE, April 15, 2016: A Deem official indicated the company does not agree with the CrunchBase figure for total investment in Deem; the official did not provide a different figure.]
With founder Patrick Grady out and new funding in, Deem anticipates layoffs and a narrowed product focus in an effort to become profitable by early 2018. That’s the gist of what Deem’s incoming CEO and COO told The Company Dime in an exclusive interview Thursday.
The company will iron out specifics on products and personnel in the coming weeks. After 15 years of pivots, name changes and bombast, it looks like this middling provider of corporate booking, expense management and ground transport technology will be different.
“Deem has been struggling with a desire to do too many things and I find that when you try to do too many things, you don’t do anything well,” said John Rizzo, who will be COO and president — and day-to-day head of the company — should shareholders approve the plan in the coming weeks. “Our plan is to listen to customers and the market, and over-deliver.”
Rizzo is associated with PointGuard Ventures, whose managing director, Krish Panu, will become Deem’s CEO. PointGuard and Hony Capital are adding $34 million to their existing investments in the company. Rizzo said employees “have a large stake in the business with respect to stock options,” and Panu said there’s a “nice group” of other investors. He declined to name them, pending their approval.
American Express, Fidelity and Oak Investment Partners are listed on Deem’s website as investors. The site also indicated that Grady has been chairman as well as CEO; but Panu and Rizzo said Panu has been chairman since 2014, after PointGuard first invested in Deem. “You should probably assume [the website] is dated,” said Rizzo.
Panu and Rizzo repeatedly emphasized their desire for improved transparency with customers, partners and the market in general.
They said they have told large customers the company will be well-funded and customer-centric.
As for products, the company is going through a process of identifying which are important in relationship to the “core” travel, expense and car service technology.
“Many customers use ancillary products that support the core, so for example a customer might use travel but also one of our shipping products or spend analytics,” Rizzo said. The idea is to determine which of those ancillary products Deem should support without diluting the core offerings. “To the extent we can put resources into the core and execute successfully on those businesses, some of the employees on the peripheral [products] may choose not to participate going forward,” Rizzo added. “I don’t know what that number might be; we should know in the next week or so.”
Other non-core products include a shopping tool for supplies and solutions for sourcing and contract management.
A handful of customers and partners contacted this morning were just absorbing the news and had no comment.
According to one former client, “They should have dropped the peripheral stuff years ago.”
The new leaders have their work cut out for them in proving it’s not too late. One industry observer was skeptical, joking: “If I had a nickel for every $1 million someone pumped into Deem, I could retire already.”
Before the latest deal, Deem enjoyed eight rounds of financing from 15 investors totaling $492 million, according to CrunchBase. Deem disputes the figure, but did not provide its own.