Belgian start-up becomes global leader through harnessing innovative technology.
The adoption of risk-based quality management (RBQM) software across global clinical trial phases is steadily increasing as more pharmaceutical and clinical research companies recognise its benefits. Uptake is primarily driven by the need for more efficient management, given that clinical trials have become increasingly more complex over the past decade.
The proliferation of data sources, including apps and remote monitoring devices, has resulted in unprecedented volumes, making integrating and unifying data of varying quality across multiple sources and formats highly challenging. Regulatory, speed, and cost-management requirements have only exacerbated the complexity.
In response to these challenges, RBQM has emerged as a critical approach that ensures the quality and integrity of clinical trials by systematically identifying, assessing, and mitigating potential risks through a comprehensive management strategy. By focusing on the most critical data points, RBQM addresses all aspects of quality management to improve patient safety, data integrity, and overall trial efficiency.
Early adopter makes a global impact
CluePoints was founded in 2012, in the early days of RBQM, and has evolved from a start-up to a global leader through harnessing innovative technology. Headquartered in Belgium, the company's cloud-based platform allows for real-time remote monitoring of clinical and operational data to drive efficiency and improve patient safety throughout the drug development process.
By developing advanced statistical and AI-driven software solutions, CluePoints empowers clients in the pharmaceutical industry to turn clinical data into actionable insights, ultimately working to reduce the costs and complexities associated with clinical development.
The company’s growth has been supported by strategic global investor Summit Partners since the firm’s 2020 investment, culminating in an acquisition deal in June 2024 by Swedish global private equity fund, EQT, which has more than 230 billion dollars in assets under management.
EQT acquired all CluePoints’ shares and indirectly those of its UK and US subsidiaries in an auction. Certain sellers, such as Summit Partners, reinvested following the acquisition, resulting in EQT’s majority stake. This exit represented a significant milestone for CluePoints, validating its innovative approach to clinical trial management. The deal also won the Best Large Cap Private Equity Exit 2024 Award at the M&A Belgium Awards.
Read more: The winners of the M&A Awards 2024
M&A Belgium spoke to Jono Pagden, a Principal on the Healthcare & Life Sciences Team at Summit Partners, and Andy Cooper, CluePoints CEO, to find out how the investor’s expertise in life sciences and technology converged with strong leadership at CluePoints, leading to the acquisition.
Jono Pagden
Andy Cooper
Partnering for diversification and specialisation
By 2020, global expansion had become the next logical step for CluePoints, necessitating a strategic partner. Summit Partners, an investor across global growth sectors, including technology and healthcare, came on board that year with a minority investment.
Jono Pagden, Principal on Summit’s Healthcare & Life Sciences Team, explains that they focused on two objectives. “The first was additional investment in product development. CluePoints had already been receiving requests from clients for new products in areas adjacent to RBQM, but the company had historically declined due to not having the teams available to pursue these additional requests.”
By helping CluePoints expand into new products, Summit Partners was both diversifying and specialising the business. While many were natural extensions, Jono explains that CluePoints was among the first companies to effectively incorporate artificial intelligence and machine learning into clinical data, finding successful applications and improving their integrated data analytics capabilities with this co-offering.
“CluePoints was among the first companies to effectively incorporate artificial intelligence and machine learning into clinical data.”
“Realising the company had outstanding in-house expertise at a time when global interest and the potential for artificial intelligence were spiking got us thinking about how to do more around this”, says Jono. “We believe clinical data is the ideal data set to train these models on; they’re massive data sources and relatively well structured. As the CluePoints team had already achieved some success, this was a natural diversification beyond RBQM and also a specialisation in artificial intelligence for clinical data.”
CluePoints CEO Andy Cooper, who was recruited to the company by Summit Partners in 2022, expands on this: “We saw an opportunity in the historically error-prone manual processes to take these and apply statistics, and in particular machine learning, to automate them as much as possible. Now, we're appealing to more of the multiple departments in pharmaceutical companies that are involved in reviewing clinical data before it goes to submission, but it's still very much within our specialist lane of analytics and data interrogation.”
Summit Partners’ second objective was building out the go-to-market function. “The team was landing impressive companies but probably punching above their size in terms of their market penetration, so we helped them build a scalable, replicable model by expanding the team and adding customer success functions, inside sales and sales enablement, until we believed the company had achieved the scale to be able to start taking on new product requests”, Jono explains.
Timing the exit
When Andy joined CluePoints, he says there were no conversations about an exit strategy. The focus was squarely on growing the business into the future. “Things went really well for us and by the following year, we had achieved 50 percent growth, closed a significant deal with a large multinational pharmaceutical company, and a large ARR deal in December 2023.”
That year, the company also experienced an explosion of interest. “The interest was serious; people had done their homework. This made us realise, earlier than anticipated, that the business was now of a scale that an exit strategy could make sense”, says Jono. “CluePoints was also going into the next stage of its development from being a single-product company in the core market of RBQM to being a multi-product AI specialist and an integrated data analytics company for the next four or five years. So, we went to market to test it out.”
“But we were not in a rush or under any pressure”, adds Andy. “Mid-January, I went to a healthcare conference in San Francisco and there was a lot of interest in the business afterwards. Our phones were constantly ringing. We had also set our 2024 growth forecast at 60 percent, so the timing felt right. We held a board meeting at the end of January in which the exit decision was made, we instructed the bank in mid-February, and off we went.”
During Summit Partners’ investment tenure, CluePoints achieved a 5x annual recurring revenue (ARR) growth, acquired 9,500 platform users, de-risked 1,600 studies and detected 142,000 issues. “Summit Partners’ strategic and tactical input, as well as the acceleration of our product development and expansion into key global markets, came at a pivotal time of our company’s evolution”, says Andy.
Summit Partners’ transformation of CluePoints had made it an attractive acquisition target, while its role in refining organisational processes and financial reporting also helped ensure the business was optimally prepared for a successful acquisition. The investor’s foundational work aided in facilitating a seamless exit.
Among the metrics that determined CluePoints’s valuation during the transaction with EQT was the company’s previously mentioned strong 50-60 percent ARR growth, combined with important SaaS metrics, such as a SaaS rule of 88, significantly above the benchmark of 40. Key performance indicators included net revenue retention of 145 percent, gross revenue retention of 95 percent, and strong customer Net Promoter Scores (NPS). “We place great emphasis on customer satisfaction and all these metrics combined drove the valuation up significantly”, says Andy.
“We place great emphasis on customer satisfaction and all these metrics combined drove the valuation up significantly.”
The company's enterprise-level customer base, including top pharmaceutical companies, and unique data moat further enhanced its valuation. “We’ve been able to develop our data moat through our customer relationships; customers entrust their data to us, and big pharma doesn’t do so with just any company. This gives us a strong advantage in training further models to provide additional offerings.” Impressive unit economics, such as the SaaS Magic Number and Customer Lifetime Value to the Customer Acquisition Cost, also underscored CluePoints' market leadership and potential for future growth.
Navigating challenges
Andy explains that the most significant challenges were the massive workload and managing the company's operations while simultaneously navigating the exit process. “Having an experienced CFO on my team who had previously been through exits was crucial. He prepared the team early on, setting clear expectations about the workload and potential challenges, which helped us maintain focus and manage the intense workflow effectively. Ultimately, the process was quick. If a company is running well and is well-managed, it will be ready for an exit. But if you purposely run a company for an exit, I believe it's the wrong approach.”
Adds Jono: “If anything, it was quite surprising how few challenges there were in the deal process. The huge workload that Andy mentioned tends to be the biggest challenge, but you also need to consider whether you can run the process without impacting the business negatively. Not only did that not happen, the team continued to outperform the budget throughout the year and throughout the process, which was very impressive. It was a smoother transaction than any of us at Summit or even our advisers expected, and that is also a credit to the planning that went into the deal beforehand. Andy and the team had already implemented processes and best practices during their first two years, creating a strong operational platform and robust business, making the process infinitely easier.”
The perfect fit
Andy and Jono agree that EQT is a great fit. “There are many synergies, and as the person running the company, that was important for me”, Andy says. EQT Healthcare Growth Strategy and the EQT Growth Fund both have a majority stake in CluePoints, and the company, therefore, benefits from both funds. “This important milestone has moved us into full private equity investment with a renowned investor like EQT bringing their experience and capabilities to the table. We're also delighted to have Summit with us still, as they’ve contributed to our accelerated growth, and we find much value in working with them.
“From our perspective, it’s the best of both worlds. We've got a trusted partner in Summit, and we've got another new partner who has the capital and is committed to the growth of CluePoints to take us to the next stage of value creation. As Jono mentioned, we’re transitioning from a single-product company to a multi-product company and require assistance to do so successfully.”
He adds that EQT has already been sharing their networks to help CluePoints contact more C-Suite members.
Exit process lessons learnt
“Until you've seen what a deal looks like, you don't quite know what's expected of you”, says Andy. “But you learn much about your business throughout the process because every part of it is scrutinised during the due diligence stage. Then there’s legal due diligence, tax due diligence, tech due diligence and commercial due diligence, and many people have never been exposed to these processes before. You also learn from the initial meetings with bidders and progressing through the stages to a successful transaction. Importantly, we learned not to go slowly but to proceed quickly.”
“Even in the best processes, there will always be challenges, especially in terms of the team's time”, adds Jono. “Being aligned with Andy and the team from the get-go really helped. Having the right team in place is critical, as is choosing the right advisers and partners. It makes a huge difference, and we were delighted with all our selections.”
CluePoints is already seeing traction around new products with customers rapidly coming on board. “We're in the fortunate position that customers sign enterprise-level agreements with us, which cements the partnership and incentivises both parties in the same direction to add value”, says Andy. “These long-term contracts promote shared goals like patient safety, cost reduction, and efficiency, providing a stable foundation for continued growth and development.”
Andy confirms that the company has a clear growth trajectory over the next five years. “We’re transitioning from a sort of start-up to a scale-up and intend to grow beyond that. So, rather than the exit being the mountain peak, we’re asking: where do we go next?”
