L.A.'s latest $1-billion tech company has a female CEO
Therese Tucker tried studying business and art. She tried launching a wealth management software start-up. And she tried selling her company.
But at each juncture, Tucker thought better of it. She pivoted toward opportunities she came to judge as more fulfilling and sensible.
The open mindset paid off Friday when the Woodland Hills technology company Tucker founded and continues to run listed on Nasdaq as part of a $146-million initial public offering.
BlackLine Inc. shares soared 39% to $23.70 in their debut from an issue price of $17, valuing the accounting software company at more than $1.1 billion. It took 15 years and Tucker’s exhausting a couple of million dollars in savings to get the company there.
“It’s exciting,” Tucker said by phone from New York City, where she rang the opening bell alongside her two children. “You think about it as a bit of a milestone day, not just for me, but the team that’s been working hard for so long.”
Financial analysts had expected a roaring welcome for BlackLine. Only about 15 technology companies have gone public this year, well below recent levels. And in an economic climate with limited places to generate strong investment returns, fast-growing BlackLine is regarded as especially attractive.
“They’ve got a fantastic product that helps companies close their books faster than spreadsheet or manual processes, so they’re in a very good business to grow for some time,” said Joel Fishbein, who researches software companies for BTIG.
BlackLine joins a handful of other Los Angeles County tech companies valued at more than $1 billion, including Activision Blizzard Inc., Cornerstone OnDemand Inc. and Snapchat developer Snap Inc., which is expected to go public next year. The company of about 500 employees also is the first in Los Angeles funded by venture capital to go public with a female CEO, according to research firm PitchBook.
The way Tucker tells it, she was never meant to be in tech. Raised on an Illinois farm, she helped her parents drive tractors and tend to cows and pigs. But because she wasn’t studious, her parents probably regarded her as not too bright, she said. They pushed her into typing classes and saw for her a life as a secretary, taking notes for someone more polished.
But Tucker, 55, did dream bigger. She took off for college at Illinois Wesleyan, pursuing bachelor’s degrees in business and French — and considering one in art. She enrolled in Apple computer programming class because it was next door to and just after a chemistry class. It was a fortuitous move; she fell in love with coding.
“The first application I did was a blinking Christmas tree made of asterisks that would turn on and off,” she said. “You give the computer instructions, and it did things. It seemed so limitless.”
Tucker transferred to the University of Illinois Urbana-Champaign, which had more plentiful tech options, to study computer science and math. She landed at Hughes Aircraft in Fullerton after graduation, writing software code to check for issues in sonar systems.
But the entrepreneurial bug itched. There had to be something more exciting, she said. She began freelancing at when she was 23. A few years later, with a son on the way, Tucker desired the comfort of a traditional job.
Over more than a decade at financial software maker ADS Associates, she rose from programmer eventually to chief technology officer of its parent company. Tucker’s busy lifestyle had begun to stress out her preschool-aged daughter, though, and she quit her job to refocus her life.
In a year, she felt bored again. Inspiration came from her financial manager. The software he used looked awful, and Tucker thought she could do better.
The original plan in 2001 had BlackLine producing analysis tools for wealth management firms. Few potential customers were willing to trust a five-person company with their sensitive data, though, and some had more pressing problems.
Tucker dropped her idea and took on one of those other issues instead.
“If you’re trying to build a business, and someone says we will pay you to build this thing, you’re very opportunistic-driven,” she said. “You pivot as many times as you need to get to where you need to go.”
Accountants relied on Excel spreadsheets and other rote tasks to check the books at the end of the month or the end of a quarter. She could save them pain and suffering through more elegant, automated programs.
Still, widening the customer base for the new venture remained difficult. Tucker poured nearly every penny she had into making payroll for a while.
“I think about being an entrepreneur like a disease,” she said. “Once you catch it, you just can’t stop. Even when it was hard and didn’t look successful, I said you might as well see if you can go a little further.”
I think about being an entrepreneur like a disease. Once you catch it, you just can’t stop.
— Therese Tucker
By the late 2000s, with the help of corporate accounting scandals in the news and a shift toward online apps, business started to flourish. But tired of the grind, Tucker hired an investment bank to shop around BlackLine in 2012.
She didn’t like the possible buyers, and a brief vacation helped her recalibrate. BlackLine accepted more than $200 million from venture capital firm Iconiq Capital and private equity fund Silver Lake Sumeru — funds that enabled her and other employees to cash out their shares.
Preparations also began for an initial public offering. Tucker would have resisted the idea of having to answer to shareholders each quarter a decade earlier. But she recognized the benefits: Being public would bring the company more publicity and help it earn deeper respect from prospective customers.
“Right now, they are distribution constrained — not a lot of people know they are out there,” the analyst Fishbein said.
Customers might not even know there’s a product like BlackLine’s out there, he said, though software giants Oracle, SAP and NetSuite could become rivals.
Tucker also felt increased comfort in knowing that because BlackLine was adding customers of varying sizes across industries around the globe, it likely could avoid the quarterly sales volatility that can tank stocks. Tucker credits a “super laser focus” on data security for persuading companies to store data in BlackLine’s online systems.
Customers include Coca-Cola, SunTrust Bank, GoDaddy.com and SiriusXM Radio. BlackLine generated $83.6 million in revenue in 2015, up 62% from the prior year. The company recorded a loss of $24.7 million, a 48% increase from 2014.
It soon could be joined on the public market by Southern California business software start-ups like Procore, Kareo and ServiceTitan.
Adam Miller, chief executive of Santa Monica talent management and training software maker Cornerstone, said a generation ago the region’s start-ups were more apt to sell than go public.
“Now you have more companies willing to go the extra mile, stay private longer and make that march to going public,” he said. “It’s nice to see.”
Funds from BlackLine’s IPO will go toward paying off debt and hiring, said Tucker, who will continue to own about 13% of the firm. As tempting as it might be, employees and investors didn’t cash out as part of the sale.
“We have a bright future in front of us, and we want to see that come to pass,” Tucker said.