Kofax continues to prosper. Driven by four straight quarters of YOY growth in software license sales and total revenue, the Irvine, CA-based ISV’s market capitalization recently hit $800M, a sharp rise from the $400M valuation it held a year previously. At its recent Transform event held in San Diego, Kofax welcomed some 767 attendees, which represented a 30% increase from the previous year.

The attendees were treated to educational sessions on a slew of Kofax technologies. This included the synthetic API/robot-based application integration developed by Kapow—the Palo Alto, CA-based ISV that Kofax acquired last year for $46.1M (slightly less than three times revenue). Kofax also had on display its data analytics dashboard technology, which was picked up with its 2013 acquisition of Altosoft, and the recently launched Total Agility 7 Web-based SPA platform, based on the BPM technology Kofax acquired with Singularity in 2011.

Despite these diversifications, Kofax CEO Reynolds Bish stressed that 86% of the company’s revenue still comes from document capture software. He said the company has no plans to deemphasize or lose focus on, and in fact hopes to grow its market share in, the capture space. Bish credited EVP of Field Operations Howard Dratler, who was hired midway through 2012, with restructuring the Kofax sales force in a way that has led to the recent success. Dratler had formerly worked for Bish at Captiva Software, and its no secret Bish wanted to bring him in he was first named CEO of Kofax in 2007, but, at the time Dratler was engaged as CEO of Anacomp.

In addition to bringing in Dratler, Bish also recently (last December) gained a Nasdaq listing for Kofax through a two million share offering, with the goal of emulating the success he had with Captiva on that exchange—where he drove the market cap from less than $10M to finally selling the company to EMC for a net of $275M. Bish has always felt Kofax was undervalued on the London Stock Exchange where it has historically been traded, and initially at least it appears his instincts were correct. After pricing its IPO at $5.85 per share, the price has risen to more than $8.50 per share on the Nasdaq, with volumes up from historical levels as well. All the company’s shares are available on both markets. 

“When we announced in September that we would be doing a small IPO on the Nasdaq, a lot of people told me it wouldn’t work,” said Bish in an exclusive interview with DIR. “But it’s actually working out better than we even thought it would. As usual, we are blazing new trails.”

We will have more from our interview with Bish, especially focusing on his M&A strategy, in an upcoming article on the Xamcor site.

Mobile capture market hot

At 2013’s Transform event, Kofax CTO Anthony Macciola predicted that Kofax would finish its fiscal 2013 (ended June 30) with total mobile capture related revenue of $2M. Bish said that Kofax exceeded that goal and that the mobile technology part of Kofax’s business is growing 100% annually—which means it should be worth $4M in fiscal 2014.  In addition, Top Image Systems (TIS) recently reported that for its fiscal 2013 (ended Dec. 31), mobile capture revenue totaled $3M. Those are some pretty impressive numbers for a market that was just coming into existence two years ago.

In late 2011, Harvey Spencer Associates (HSA) came out with a study forecasting some fairly aggressive growth rates for mobile capture. At the time, some of the numbers seemed a bit optimistic, but judging by recent results, and the early adopter case studies we’re starting to hear about, maybe they weren’t that far off the mark. HSA has always been a visionary organization, and I am once again looking forward to the annual HSA Capture Conference, scheduled for Sept. 3-4 on Long Island. This year’s forward-looking topics on the preliminary agenda include “Photo and Video Understanding – virtual reality used in transactional information” and “Voice and Data Capture in Mobile/Social Media Understanding.” (Full disclosure: Harvey Spencer, principal at HSA, is also a principal in Xamcor).

 Recent personnel moves

TIS recently named a new Executive VP and GM for TIS Americas. Avi Mileguir joins TIS from Click Software—which develops cloud-based workforce management software. According to the TIS press release, “The company’s focus on developing mobile and cloud business in the U.S. aligns with Mileguir’s long-term track record of driving multimillion dollar sales.” The move coincides with TIS combining its North and Latin American operations. Mileguir takes over for Omri Gelb, who had served as GM of TIS North America since 2012.

Kofax is still hiring sales people and at the recent Transform event, EVP Howard Dratler noted that there are still several open positions to fill. Bish, in fact, noted that while investments in the ramp up of the sales force are currently putting a burden on Kofax’s bottom line, he expects the company’s EBIDTA margins to reach 20% in three years, thanks in part to the revamped sales force.

Blau retiring

Scott Blau is retiring from IBM. The Datacap founder, whose capture company was acquired by Big Blue in 2010, had most recently been serving officially as Worldwide Director of Document Capture for IBM and unofficially as “Capture Guru.” Blau said he doesn’t have any current plans to start a new venture.

 Recently Blau had spent quite a bit of time evangelizing capture for IBM—especially focused on spreading the word about the potential of distributed capture, an area where Datacap was a pioneer with one of the first browser-based production interfaces. “I am very proud of the people that have worked for Datacap—some of them stuck with us for 15 years or more,” Blau told DIR in a farewell conversation. “And when the company became part of IBM, and was successful in IBM, they got to be part of that. For the first two years after the acquisition, we retained 100% of the Datacap employees.”

 Blau feels he is leaving on a high note as IBM is integrating the Datacap technology into its next-generation Content Navigator UI. “It offers a single interface for capture and imaging, including access to all IBM repositories and any third-party repositories that support CMIS,” he said. “It really makes sense.”

Datacap was founded in 1998 and had an on-again off-again relationship with IBM before being acquired. “One of the things that attracted IBM to Datacap was its architecture,” said Blau. “Since the acquisition, they have continued to expand, improve and ruggedize our platform.”

Odds and ends

• EMC’s Information Intelligence Group, rumored to be up for sale following a disappointing 2012, kicked off 2014 with a slew of new product releases. In January, the $650M division, a roll-up of Documentum, Captiva, Document Sciences, and some others, announced nine new products. These include a Mobile Toolkit aimed initially at current Captiva capture customers, an updated version of Captiva Invoice Capture, and a new InfoArchive solution designed to provide a unified archive for structured and unstructured information. EMC then followed up with a major release of its ApplicationXtender mid-market imaging and ECM software. 

• BancTec was finally taken off the market by equity investor HandsOn3. HandsOn3 already owns the BPO organization Dataforce Group, which it plans to combine with BancTec to create a $280M organization. In addition to BPO services, BancTec has a document scanning hardware and software business. According to the press release, “The current BancTec leadership and management team will remain in place and play a key role in the growth of the combined company.” In 2012 BancTec had an agreement to be acquired by document outsourcing and software specialist TransCentra, but the deal was never completed. Before that, BancTec had postured for an IPO, filing an S-1 in 2007 and amending it through the first six months of 2011.

• Ricoh’s recent acquisition of mindSHIFT Technologies from Best Buy is designed to expand the MFP vendor’s managed IT services offering. In addition to managed IT services, mindSHIFT offers cloud, data center, and professional services. It has 7,000, mostly mid-market clients. Its services will now be made available through Ricoh’s direct and reseller channels.

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