In 2009, Stanford business school grad Peter Lehrman sought out to revolutionize the way companies conduct M&A transactions and raise capital. His hypothesis was that an online platform could help streamline the deal process from end to end starting with identifying and accessing prospective buyers / investors or in the case of the buyers / investor, identifying potential targets. Armed with his theory, he recruited a team and raised seed capital. The future looked bright and participants in the deal ecosystem were intrigued signing up for trial memberships. Over time, however, product-market fit proved elusive.
In 2012, Peter raised a Series A round from Redpoint and he staffed up a full brigade of business development professionals to work both sides of the market. Newly minted college graduates blasted emails and worked the phones attempting to sell subscriptions to bankers, investors, companies, and others. Axial’s marketing team went on the offensive with frequent newsletters and videos of customers who had managed to source a deal from the platform.
Yet with all the fanfare along with conferences to enhance personal engagement, Axial struggled to produce any real momentum in closed deal volume. And gradually, the company stalled on multiple fronts and key people left the Company. Sensing trouble and a turnaround opportunity, private equity firm Edison Partners moved in. In August of 2016, they invested $14 million in the Company taking a meaningful ownership stake.
Sometimes change can be a good thing. The Company started focusing more on driving traffic to the platform rather than relying on an outbound calling effort. And these days, while investors don’t rely on Axial to any degree for good deals, it’s a relatively easy way to comb through opportunities and mitigate the small risk that they miss a good deal on the platform.
Axial reports over 2,000 closed transactions since inception and $25 billion in transaction volume, but those are likely massaged figures. Taking a closer look at the organization and its team, one clearly senses that Axial has lost the luster it started out with. The silver lining, however, is that deal professionals all over the world know about its platform and a decent number are subscribers. Moreover, the management team has learned a whole lot over the last decade.
It’s wait and see for now. Who knows, Axial could actually be just one tweak away from breaking out.