Case Study: hedgehog lab

Scaling a successful business requires more than capital. As companies grow, founders often need to evolve their role, build a stronger leadership team and introduce the structures needed to support the next stage of development.

When Maven invested in hedgehog lab, the business had already established itself as a fast-growing technology consultancy with ambitions to expand internationally. Working alongside founder and CEO Sarat Pediredla, Maven supported the business in building the leadership team, strengthening governance and putting the foundations in place for continued growth.

During the investment period, hedgehog lab quadrupled its revenues, expanded its global presence and developed the organisational structure needed to support its next phase of growth.

In this video, Sarat Pediredla, CEO and Co-founder of hedgehog lab, and Michael Vassallo, Investment Director at Maven, discuss how the relationship extended beyond funding, including building the senior team, providing strategic support and helping the business prepare for long-term success.

Sarat Pediredla: Hedgehog Lab is a human-centred global tech consultancy. That means that we help brands develop digital products all across the globe. When we started our journey, we were looking to expand our business into the United States, which needed a little bit of investment, and ironically, we weren't at that stage looking for private equity. We just wanted to try and get some additional capital that we could basically invest and de-risk the process of opening an American office.

Michael Vassallo: Finding Hedgehog Lab that was building world-class software applications from a small base in Newcastle, and it had this massive growth potential, but needed a partner to help harness it. That's what we liked about the business when we first met. With our help, Sarat has managed to build that team around him and delegate responsibility and become a fantastic leader. Fantastic software applications that Hedgehog builds, help people become more efficient, more profitable. There's great demand for their services. So, we saw the team, we saw the growth potential, and we also saw value added that we could bring.

Sarat Pediredla: One of the things that really attracted us to Maven was that we felt that they could give us more value than just the funding, but I think what really sold it for us was the relationship that we built up with Michael. Bill, who was the founder of the business, actually spent a lot of time engaging with us, and building that relationship with us. So we felt like we were valued as an investee.

Michael Vassallo: I joined the board in 2017, and this was to work closely with Sarat, to help them build out a senior management team because the idea was to scale the business fourfold, and that's not easy to do and it's not easy to do on your own. So we had a hands-on approach with this investment. We've introduced a fantastic chairman, Charles Andrews, who's a very experienced chap across the software sector, we helped source the COO into the business, Yousaf Khalid.

Sarat Pediredla: Maven's funding really enabled us to achieve our growth ambitions because of three reasons, really. The first thing is just numerically, we quadrupled our business from the time we took Maven investment just in terms of topline revenue. We managed to bring a lot more professionalism and put a lot more structure into the organisation. We had our first board of directors, our first chairperson, it allowed us to really start thinking about business as a professional unit, and how we would scale it into a global business.

Michael Vassallo: We work very closely with Sarat and mentored him, and by the end of the investment, when we exited, the team was fantastic, it was a broad, rounded team with Sarat as a fantastic leader. It's been a very good relationship from day one, and it's grown into a really powerful relationship, in one which I think will endure, even now we've exited the business.

Sarat Pediredla: Michael has been instrumental, particularly through the challenging periods of the business. I think obviously when things were running fine, it's great for him to take a bit of a step back and let the management team do what they do best. But I think when things were challenging, when you needed that support and somebody to talk to, Michael was always there, I think more so than most private equity people will be, to really support the business.

Michael Vassallo: I worked closely with Sarat and the team to make sure that they would progress after the deal as well. So we did work around future-proofing the business, around what the business would look like post-investment of the new owners, because we believe in helping these businesses grow, make a good exit for Maven investors, but also we want to see the business sustained and grow after we've put our money in.

Sarat Pediredla: Our current aspiration is to effectively, like we did with Maven, we grew the business four times in the Maven investment period. We want to grow the business five times now and build a global technology powerhouse and hopefully with our new investors and the support that we've got, we're well on that journey.