By John Park Mar 24, 2021

It’s no secret that the ways in which businesses and customers interact has evolved rapidly over the past few years. In 2015, our technology private equity team developed a thesis that legacy infrastructure was not equipped to keep up with the growing expectations for a customer-centric and omnichannel engagement experience. Armed with this idea, we set out to find the best next generation of technology for managing customer engagement workforces.

We met multiple companies and management teams while exploring this thesis – from large public companies to assets in other sponsors’ portfolios. And time and time again, a little known business in Minneapolis came up in our diligence findings as a potential disruptive threat for the future: Calabrio.

At the time, Calabrio was an emerging challenger in the workforce engagement software space. It was a homegrown, venture-backed company with a promising next-generation platform designed to improve the performance of customer engagement centers, but carefully managing investment to stay cash flow positive and trying to find ways to scale.

As we got to know Calabrio’s management team led by President & CEO Tom Goodmanson and spoke to leaders across KKR’s portfolio companies about the requirements for a next-gen workforce engagement platform, our conviction in the market opportunity continued to grow. It was through these early interactions that we began to develop a shared vision with Tom for how Calabrio’s platform could expand to the global stage, and our role in accelerating this path forward for the company. With Tom’s support, KKR was able to acquire Calabrio from its early investors through our North American private equity strategy in a proprietary process in 2016.

When the transaction closed in September 2016, Calabrio ONE® was still under development as the first native multi-tenant cloud workforce engagement software platform in the market. In many ways Calabrio was still an underdog – a Minneapolis-based startup with a yet-to-be-launched flagship product, in a market dominated by large public companies and well-known Silicon Valley players.

Having tremendous confidence in Tom’s leadership, we worked with him from day one to build a world-class management team and developed an ambitious multi-year product strategy for Calabrio to evolve from a promising startup to an industry leader. We focused on accelerating the transition to the cloud through investments into the Calabrio ONE® product platform and enhancing the digital go-to-market strategy. KKR invested almost $20 million in growth investments in the first year alone, taking the business to negative margin, to support this acceleration with a focus on long-term benefits in place of short-term profits.

With execution the central theme for the first few years of our investment, Calabrio’s growth began to accelerate and transitioned organically to subscription revenue. As the company built out its next generation product framework, we turned to M&A to augment our capabilities in workforce management.

After many years of dialogue with the founder of Swedish workforce engagement leader Teleopti, Calabrio consummated a transformative deal to acquire the company in June 2019. This strategic combination, which was supported by KKR’s international network and in-house capital markets team, extended Calabrio’s capabilities in workforce engagement, expanded its expertise in highly regulated European markets and added Teleopti’s leading scheduling technology to the Calabrio platform.

Calabrio opened a new headquarters in October 2019 that is a cornerstone of the growing technology scene in Minneapolis and has more than doubled its headcount in the U.S. during our investment – in addition to growing its international employee base from five to more than 200 (primarily from the Teleopti acquisition). When Calabrio’s and Teleopti’s employees gathered together for the first time at Calabrio’s new HQ for a strategic offsite in the beginning of 2020, we saw many of our long-term initiatives finally coming together. As employees discovered the similarities between Swedish and Minnesotan cultures and brainstormed ideas for collaboration and growth, it was already clear that Calabrio was well on its way to achieving success.

Calabrio has grown revenue by more than 4x during KKR’s ownership while accelerating the mix of cloud bookings and returning to even greater profitability. With the shift to work-from-home during the pandemic, the value of Calabrio’s cloud-first platform has been increasingly clear to market participants, and this past year has illuminated the trends we identified in 2015 towards ominichannel customer experiences and the importance of flexible tools for workforce management.

We are proud to have supported Tom and the entire Calabrio team on their journey from a homegrown startup to an international leader in workforce management software. As Calabrio enters its next chapter of growth with Thoma Bravo, we are confident the company is well positioned to continue to capture market share and that an ever brighter future lies ahead.