Episode 23: Building a £1bn business from scratch

0:01Chris Maguire:Welcome to the Dealmaker Uncut podcast where we speak to some of the UK's most exciting entrepreneurs and hear their investment journeys. We'll discuss the challenges, successes and lessons they've learned along the way with expert deals commentary from Jonathan Boyers, Head of Avarice and Marcel Corporate Finance and me, Chris Maguire, Executive Editor at Business Cloud.

0:27Chris Maguire:Welcome everyone to the latest episode of the Dealmaker Uncut podcast powered by Alvarez and Marcel. My name is Chris McGuire and I'm the Executive Editor of Business Cloud. As always I'm joined by the multiple award-winning dealmaker himself, Jonathan Boyers. Jonathan's been involved in deals totalling billions of pounds during his long and illustrious career and he's a managing director and head of Alvarez and Marcel's corporate finance practice in the UK. Hello Jonathan. Hi Chris, looking forward to today's session. Yep, this is the podcast that gets you inside the deal. In the first part of today's show we're going to be interviewing our special guest, after that we'll then have a short break and in part two Jonathan will lean on his 35 plus years of experience of working in corporate finance to answer listener questions.

1:07Chris Maguire:So Jonathan, who are we speaking to today? Well today Chris we'll be speaking to Mia Drennan. So Mia's hopes of being a fighter pilot were dashed when she was younger. But as you would say, Chris, she's been flying high ever since. Earlier this year, Glass, the London fintech business that she co-founded in 2011 with£6 ,000, secured investment from Oakley Capital and LaCasse in a deal understood to have been valued in excess of a billion pounds. So welcome, Mia. Hi. Mia, I'm going to kick off with a couple of questions, but I'm just going to start. We're filming this and recording this episode in Avraza Marcell's offices in London, in Finsbury Circle.

1:53Chris Maguire:And you pointed out that your first glass office was just across the road, wasn't it? Yes, absolutely. Finsbury Circus in a basement. And yeah, it was, well, I was sitting there trying to build a business. It was very cheap in rent, but there was building the Lizzie Line, and it was like a thump all the time, all day long, making vibrations as we were trying to get our build our business you've just moved into a new plush office probably a lot more expensive than that one absolutely that's just sort of shows the journey you've had in the last 15 years I'm going to take you back a bit actually Jonathan touched on it in his intro but as a teenager you joined the air cadets and dreamt of being a fighter pilot so why didn't you well at that moment in time um girls weren't allowed to fly um and so you know it was it was some time after that that they they changed the rules um so you know that was all i wanted to do i had started to learn to fly as an air cadet and loved it um but if i if i wasn't able to go the full way i wasn't interested so i quit when you raise the investment there are all sorts of headlines about breaking glass ceilings in reference to the the name of the business and everything else as well um but but i think i'm right in saying and i think jonathan will correct me if I'm wrong I don't think we've ever had a holiday rep on the Dealmaker Uncut podcast because I understand after studying art at college you found yourself as a holiday rep in Corfu before the direction of your life changed is that true?

3:18Yeah there was a little bit in between that so I went to art college because that was my second passion I started doing a course in graphic design and when I left the college I got a couple of jobs but I wasn't really kind of going anywhere and so my mum said to me get on the train to Liverpool Street take your CV and go around the temping agencies and that was really the one of the changes that basically I ended up at the Royal Exchange at Life and I did that for about six months and then spent the next few years temping around the city in various different places and then took the chance to become a holiday rep for just over six months in in Corfu your first first break came in 1992 when you started working in the capital markets team at KPMG which you must have been there when I was there must have been there at the same time so you you then worked at a few other businesses before in 2005 you set up Square Mile Connections so that was a financial services recruitment business maybe you could just talk a bit about what you were trying to do when you set that up?

4:28So it's probably best to learn the backstory to that because it was kind of again a bit of left field. So prior to setting up that business I'd effectively come into my career now which is corporate agency and trust and I started to build the Bank of New York's agency and trust business in Europe from 2000 and I'd built this big team and we were focusing on all those um securitizations and collateralized debt obligations that broke the world right had a brilliant career and um i was promised a promotion in 2005 which at that time was a big deal a big job and at the 11th hour um an american candidate was flown over and the job no longer existed and so that was basically the moment i thought a rude word and decided to look for another opportunity and as a result of that a client was a US trust firm very niche firm were looking to set up a trustee only advisory practice in London I knew the partners and they asked me if I'd like to help them and I said to them I'm not going to set it up in your name as law firm I'm going to set up square mile connections because I know everybody in the city and I'll make the connections to you know getting them to help build your business so that was kind of a there's been a theme for me out hustling knocking on doors trying to get people to buy something and as it resulted as I was going around at the end of 2005 and early 2006 all of my trusty friends in the market and people were saying Mia look we're really busy doing all these deals can you help me find people so I started doing side hustling of headhunting on the side and then that law firm the people left and I became I pivoted to become a full-time headhunter in corporate agency and trust and that took me on that journey to to eventually get to glass in 2011 but you you'd already got yourself a good network in that so I remember about that time I sold a business called SPV management to Wilmington Trust you know that business which was i said yeah i sold that when i was working down in london and um one of the things the features of the market at the time there was um there was so many pfi projects that involve securitizations and that was a really booming bit of the market it's not there in the same way anymore but it was a really booming bit of the market so i can sort to imagine that um there was loads of activity at the time um so you in 2011 i think you you finished up with with the recruitment and moved full-time into glass could you just talk a bit about glass and give us a flavor what what what you're doing there yeah sure so i mean again the the the origination for glass was the fact that um at the end of you know the head hunting business i was getting a bit restless and i decided i'd done with it all it's not a great business i wasn't very motivated with it and I actually at the success I had eight people so you know putting that I hadn't found my passion and I was seeing these amazing jobs coming through from the likes of Wilmington and other because they were my clients other trust banks and so on and I thought I really want to do this job but I can't go back to working for anyone else and sort of separately a lot of my previous clients who'd been investment banks on prop desks have now moved into these kind special situations credit funds and what have you and were looking to buy these broken leveraged loans and try to get their money back so you know there was a real opportunity and it was sort of an emerging as a sort of restructuring activity was happening and what I gleaned was that actually the commercial banks like the Barclays the RBS HSBC etc were not really set up to help be proactive and commercial to help this administrative facility agent and security agent business.

8:26So that was my idea. I wanted to set up my own agency and trust business to compete with the Bank of New York. And I didn't know how to do it. And that broken leverage loan market gave me really the idea. My business partner at the time, he was a lawyer and he had come out of securitisation, was looking for a new job. So I said to him, do you want to help me? And that's really how we started. So today, I mean, Glass has grown from a business that was focused on complex and restructuring activity to servicing all sorts of administrative, institutional debt, performing, non-performing, you know, bonds, loans, equity, the lot on a global basis.

9:08Yeah. And the debt market over the period you've been doing that will have changed quite significantly. You were filling up, it sounds like you were filling a gap in the market that was needed where the lenders needed that support. But you effectively created a market, haven't you, over that time? Absolutely. And it's only the other day that I actually stopped to look back and go, there really wasn't anything doing this. We created a new company service that didn't exist. And so, yeah, I mean, it was, I wanted to kind of obviously get back into doing bonds. That was kind of my aim. But obviously doing those deals that nobody else wanted to do, really allowed us then to showcase how well we did the difficult stuff at the same moment the private credit industry was starting to emerge so you know in the UK direct lending they didn't want to use a bank agent they wanted to use an independent who was really going to give them a high touch service and that sort of went from there really and allowed us to sort of strategically pivot around the debt markets until eventually we became a get into the bond world really interesting

10:15Chris Maguire:It's a fascinating story. I've written down three words, well four actually, but three descriptions of you based on what I think, what I've heard so far, just in terms of your queer story to this day. How would you describe yourself? And I'll see if anybody can tally out with mine. no um i am incredibly driven and um i've written determined so i think that's that's a tick we'll kind of go down that you know i don't know what the word is so resilient um you know and um you know yeah i don't give up easy because i've said visionary because you are you identified an opportunity i also stuck in there no messing because i get the impression once you've got an idea there's no messing there's no stopping you um what i think is fascinating about your story is people see like the investment and they see the scale of the business etc what they lose sight of is the fact that when you started glass you had 400 meetings across the city spread over four months before you secured your first deal so how did you keep yourself going during those four months i mean it was one of those things where it almost became not a game that's the wrong word but you know they get so many no's you know and i'd also i've also been out of the market for seven years so whilst I had a network I had to get back into that network again and the lawyers always like to meet up find out what's going on so a lot of those meetings were with law firms and people that I knew in that space but we had lots of green shoots within the 400 meetings and one of them actually came probably a month in from a very large investment bank that said they wanted us to step in and replace the agent on aircom remember the irish telephone so we were like no we can't i mean it was a huge syndicated loan and we're like look we can't do that so we knew that we were going to get there in the end and then the second green shoot came when goldman sachs said to us um we really like your idea we think you've got a great business we think we would love to support you um we'd like to play you into the f1 debt and i'm a massive petrol head that's another conversation so we were like but we want to send the man from the agency team around to look at your processes and procedures and your system so you've never seen people run so quickly back to the office over the road to start getting all the processes and procedures in place because we didn't really have that we were sort of marketing and selling ahead of actually having every a proper thing to do something on I don't think that sort of focused our minds but the man from the agency team never came around um but we did get a deal not from not not till later from goldman but we were set up properly when the first transaction came in and a lot's happened since then so i was looking at the stats right you manage assets 850 billion dollars you're in 11 countries 15 cities with the addition of rome and milan recently four continents uh you've exceeded 100 million in ar are you've got 500 staff and you've done four acquisitions you know so what what do you put that down to well do you know what the one thing about it is is it's culture so i think the biggest success of the business getting to where it is is the culture that's been created and that people live in the business so the dna initially when we first started was you're only as good as your last deal because the market's very fickle and even now when I do inductions I still tell them the journey and the story and I still talk about that but also celebrating right because when we got the first transaction we went oh my god someone's given us the transaction and let's celebrate you know they've trusted us to do this and that's kind of the mentality that we've bred amongst our people but also it's it started off as a family you know we're very much a family of people around the world we operate on one platform there's collaboration and communication cooperation amongst all the office i'm a big proponent of that again goes back to culture and maintaining even at this size the entrepreneurial culture of disruption rethinking reimagining reinvention and I think people really like to be part of that.

14:32I always say to our people that anybody can show leadership and innovation at any part of the business. People can step up and it sounds like that's your sort of culture. So your first engagement with private equity was with Levine Lightman in 2022 when I think you were turning over 45 million, something like that and making about five million of EBITDA. So it was a proper strong business at the time. And that allowed you to de-risk and get a new partner on board. I'd love to hear what you were thinking when you were entering into that transaction and what were the drivers towards it and why choose them?

15:19Sure. So 2020 came, obviously COVID. And I remember there's a few nuggets of things that happened. So I'll just share with you, if I may. So I was flying. There was talks about COVID, so it was coming east to west. I actually flew to New York on a Virgin Atlantic plane, and there was hardly anybody on the plane. And the air hostess said to me, people keep nicking our toilet rolls. And I said, what are you talking about? And they said, well, because of this COVID thing, you can't buy toilet rolls. So I was like, OK. okay so when I landed in New York I just go by and I was talking to my husband because I was worried anyway COVID was coming but we we said I said to my CTC team my COO I said look we need to make sure everybody can work from home this is coming and you know I really want to make sure because if you back off these people I would never have allowed them to work from home we got ourselves organized and we got everybody agile and literally as I flew back they got the first case in New York with COVID from that it was solicitor or whatever but it wasn't me um but I came back with lockdown we phoned everybody up and told them we were open for business and it was an amazing time because we were I think we did a closing on the first week of lockdown with Addison Lee anyway so we go through all that process we go through the lockdown um and I me and my business partner were like you know what maybe this is a good time to think about having some liquidity in our business um so then you know after we started getting back to normal in 2021 well exactly and we we then hired corporate finance folks um and started preparing for we'd had private equity people knocking on the door for a long time because obviously we've been tracked um so eventually we did lots of marketing meetings um which is like saying don't call us we'll call you my my business partner to say as soon as you ask the question about how many women in their firm I knew they weren't going to be successful um but no all joking apart we we we chose a few a handful of people that we liked and Levine Lightman was one of those people um and we didn't know who they were they were in fact the underdog to be honest with you initially um but the way that the team you know sort of managed to manifest themselves over that kind of very short period in the investment round yeah they were the ones that rose to the top so let's bring it right up to date um so earlier this year um your european um mid-market private equity firm oakley uh capital and one of canada's largest institutional investors lacasse um made a major investment into glass um so that must have been a really big event for both you and for the business could you give us a feel for how that deal evolved it's worth it's worth saying as well

18:24Chris Maguire:for the benefit of our listeners and viewers as well that all that wasn't disclosed reported widely is in the region of a billion i mean you were not talking small change here are we no it was um it was amazing really amazing um yeah so uh that whole journey started are probably um at the end of 2024 you know these investment bankers ask you to turn up at their private equity conferences and start talking about your business so i did some of those road shows um and then obviously those people would then phone my current investor up and say when are you going to sell glass um and so momentum was building in the background Levine were also looking to fundraise this year in Europe and so they were looking at which portfolio companies they could showcase and I think my investor started to realise that Glass would be a significant you know result for the firm and obviously for the shareholders.

19:27So we had a conversation early Q2 maybe around let's go for this because we've got a lot of momentum um oakley were definitely up there and had i've been talking to them about 18 months before and i said when i walked in the room there was an all-female team in the room and i was like wow and and christina popskew is absolutely amazing as is sam fennett whitley so anyway they really um made me feel very welcome and they are set up to support founders so they were my benchmark and then we met with I mean probably over 100 PE firms in all from the good bad and the ugly shall we say who were interested in investing in the business and so we hired two investment banks Deutsche Bank and Baird and when we started the process it was a huge a huge mammoth exercise and I didn't even realise because nobody really tells you as a founder or even anyone that's not been through this process what to expect because I don't know if they assume that you know what to expect but there was a lot.

20:42We were ready because we had a data cube and all that good stuff but there was a lot of time spent, diligence, conversations, calls, meetings and then we finally got to a place at the end of november where we were ready to go and so the button was launched with a very small group of people and we went from there and what what you so you ended up with two taking on two new investors they can both come in at the same time they so lacasse is one of does a lot of co-invest with oakley and that kind of was so oakley have led the deal and then they brought the cast in alongside them and Levine Lightman have rolled over as well aren't they so they've still kept an equity stake as well and you were you were saying when we were talking before that you were the you were enjoying the relationship with Oakley it sounded like that was going really well I'm interested in what they're doing that's so right that other PE houses might learn from yeah I mean I think the the interesting thing is and at the end of the day it's look we all know right you you want to do you know 3x you want to do 3x your investment right and so how do you get there and you know glass was never really um a buy and build shop and in fact we've actually done four acquisitions is more by luck than judgment because that wasn't what i set out to do um but they came and it made sense for us to do those acquisitions um i think the the thing about oakley is because they're used to working you know founders i am obviously ceo as well but they are really we are it's a partnership approach so we have a strategic plan we want to now become a fintech and 3.0 and so we are working together to leverage resources i mean they phoned up all of their lps and said you need to use glass um you know they've done the things that you might expect people to do but they've actually basically been bullying their lps to use class and they're setting up amazing meetings they are they've got a lot of influence and i think in some ways oakley are a bit of an underdog in the private equity space and so surprisingly they've got a lot more resources than people think um so i'm just using them as a resource and i like the people a lot we went on a a little off site at the beginning just two weeks after we um signed the deal on new year's day and it was in switzerland because one of the partners lives in switzerland and so we had a working session in the morning and he said i'm going to go for a hike with my management team and off we go up the mountain and we get around the corner and there's this beautiful table laid out with a lunch and a chef and all sorts of things and it was like going on a date

23:27Chris Maguire:with 10 people what are the odds of that walking around the corner and seeing a table laid out for 10 people um it was you know so so what i mean is they want to have fun as well and we want to have fun but obviously we do it we're taking it very seriously as well now my nan my nan my late nan god bless her she always said to me she's never asked a lady um what she thinks the enterprise value she's got in mind for glass moving forward um but i will ask the question i mean how big do you think glass can become so i mean look i never thought we'd become a unicorn um the last deal i I called it Project Unicorn.

24:00Chris Maguire:I love the term unicorn. Jonathan hates it. He's always talking about it. Well, it was because my previous deal was called Project Unicorn. So, look, I mean, I think that's almost keeping us the confidence to dream big. So I've set myself a goal of five billion quid on the next one. And I've said it out loud. So we were aiming to grow, to get to an EV of five. and to do that will you'll need to acquire more businesses as well will you or yeah i mean i think there's there's two strategies really one is to do more acquisitions that make sense um and then the second thing is really um to complete our digital transformation to be a tech company yeah suppose you'll have like everybody else you'll have people talking to you about ai and the the way to develop the business have you got thoughts in that regard or we're already on that journey um so we've been building our own um proprietary system internally now for a while um which is a foundation stone for our tech co um and we've got a very sort of well thought through digital strategy where we're going to take the business which is really exciting um talking about ai um i i look you're unusual um for lots of reasons one you're a female who's built a billion pound company which is very unusual um and i asked chat gpt i said give me a list of all the women uk founders who've built billion you know pound or billion dollar obviously unicorn you know valuation companies and it's a small list it's a very small list ambo den stalin bank will go down denise coates at about 365 there's a few others not many um do you see yourself as a role model do you see yourself as breaking down barriers for your successors do you know what I haven't really thought about it like that because I haven't had a lot of time but I am involved with you know other female organizations particularly super scalers which is something set up by Sam Smith who was the first female um CEO in a public listed company um so over 50 million and they're you know ultimately I think it's it's it's my duty to help other female entrepreneurs get to become a billion pound plus company I mean if I may part of the problem we have is because the current system for financing doesn't really favor females I a lot of ladies I've met they've got these great businesses they've started to slightly grow find success but what do you do you borrow from family and friends if you need money then you go angel investors then series a etc and your share capital starts going down and i've met a lot of females i've literally got 10 15 percent of equity left sort of hanging on to their company with the fingertips so that the whole financing for me investment and financing is not right to promote female founder entrepreneurs yeah i think quite a few people who are watching the podcast will know my wife is a CEO of a business and a founder and she often says that the ladies in trying to do that need to sort of perform out of the skin just to compete with fairly average male counterparts which I think what you're doing is inspirational I think it really is you may or may not see yourself as a role model but lots of people will look at you and think if you can do that then then maybe they can yeah i hope so um i'm gonna ask you a quick question before we go to a break if i may is that in terms of your investments fairly soon after yeah so in terms of your acquisitions fairly soon after your investment i know you brought an italian company leading debt administration provider loan agency services um jonathan mentioned it i mean if you look into your crystal ball have you got three or four of those lined up for this year yeah I mean actually surprisingly enough I think a lot of the market has actually looked at glass and gone wow this is an opportunity you know or actually do I need to be in this business um because they can't figure out is actually what what the how we got this valuation um it's what the secret sauce is so there's opportunities from us from folks that maybe want to um carve out their businesses there are also a number of businesses coming to market but we've got a few things in the pipeline, but we're going to be very selective about what we decide to go after.

28:39Chris Maguire:Yeah. And Jonathan's a dealmaker. I'm more the journalist, the marketing person, but one of the big trends you've got is the name Glass. It just works. It works on so many different levels as well. Time for a quick break. When we return, Jonathan and I will be discussing our interview with Mia Drennan, CEO and founder of Glass and answering your listener questions. That's all for part one.

29:02Chris Maguire:So welcome back to the second half of the Dealmaker Uncut podcast. One of the beauties of this job is sharing the honours of co-hosting it with Jonathan Boyers. And when I hear him get inside a deal, his eyes light up and his eyes have just lit up. There's an enthusiasm and a spring in your step, Jonathan. We've just interviewed Mia Drennan of Glass. What did you think? So I thought she was an inspirational lady, actually. She's spotted an idea. and she built a network and she spotted an idea and then she's thrown wholeheartedly everything about herself into it to grow it and develop it. And I just think she's been visionary and she's shown how a lady leading a business, founding a business can grow it.

29:50And she's handled the taking on private equity investors really well. I just thought and like I say I do think she is an exceptional role model for for the other ladies who are who are thinking of founding and growing businesses so I'm massively impressed I thought

30:09Chris Maguire:I thought she was great yeah and you can see why you know people say they invest in people you can see why they attracted so much interest because they wanted to invest in her and the thing is is that I don't think she's she's not finished yet for sure so no I thought she was amazing I felt the thing I liked about her is that when she launched Glass in 2011, 400 meetings before she secured her first deal, albeit she had a few, you know, a few eyes in the fire as well. And when she was raising the investment, she met 100 PE houses before she opted to go with Oakley as well. So yeah, really was a class act as well.

30:46Chris Maguire:So this next section is called Ask Jonathan. It's when listeners can ask Jonathan any question they want. One week we might change this up and it would be Ask Chris, and the answers will not be as intelligent as yours. But the first question, Jonathan, I notice you've just flown back from our Rosamart Sales global leadership meeting in Connecticut. One session covered the firm's plans to further build AI into their business model. Mia just touched on it as well. What was your take out from that event? So I think as regards, well, the take out from the event was that A &M is a phenomenal business.

31:18I mean, I came away just, it's just a great business to be part of. I think the specific question about AI, I think across professional services and pretty much every industry, people are now wrestling with how to build and capitalise on the opportunity that AI presents and to deal with the threats. and I think that in some industries we're going to see wholesale change but I suppose the philosophy that when I look at it I think what AI should do is turbocharge people so people will become much, much more effective as AI is embraced in their businesses and I think in due course a lot of businesses will hire less junior people but I think in the shorter term I think it's all about how you turbocharge the people in the business using AI.

32:19But you can't ignore it. Everyone's got to have a strategy. I think every deal that we do now going forward will involve AI due diligence. In the same way, two or three years ago, everyone started doing ESG due diligence. I don't think a deal will get done now without AI due diligence. So already we're starting to see people offering due diligence providers offering AI due diligence. And, you know, I think it'll be there on every deal now.

32:50Chris Maguire:A phrase I hear a lot, question two, is that business doesn't like uncertainty. And I'm assuming that's the deal making sector doesn't like uncertainty either. We're recording this at the end of March. The conflict in the Middle East is raging at the moment. Is that having an impact on the deals market? So the obvious thing that people have noticed even in the last week or so has been that interest rate cuts that had been expected are no longer likely to come through as quickly. So I think the landscape for the cost of debt is changing and that inevitably does have an impact on the deals market.

33:35so far the gold price hasn't spiked and so you know there's a few indicators that say that people think there's a shock that might be short term over the next few weeks and months where time will tell you know it could be over quickly or it could go on a long time inevitably where Anything that involves more pessimistic views of GDP growth and borrowing has an impact on the market. We've not seen loads of deals cratering yet. I know one or two deals around the market have either gone on hold or have been deferred. But so far, I think the jury is actually out on exactly what the impact will be.

34:16Chris Maguire:Okay, and last question. We've got a question from a regular listener. everyone knows there's a lot of private equity money about they ask but they can't find a home for it is that your experience yeah so it's partly linked to the the last question um there's lots and lots of private equity funds been raised it's as an asset class it's been very successful and so there are you know a lot of the pe houses are sat on a lot of dry powder but they need to find quality places to put it. Certain sectors have become attractive and others are people more wary of things like consumer. Certain parts of technology services have been really attractive.

34:59Even in technical services which are a bit more manual activities people are starting to see a lot of private equity activity. but there's uncertainty in the market at the moment and so whilst there's a lot of money available they'll deploy it carefully and so we'll see at some point the market will improve and recover and there may be a bonanza but at the moment the P houses are looking really carefully where to invest.

35:31Chris Maguire:Really good insight. Thanks very much Jonathan. That's all for this episode of the Dealmaker Uncut podcast powered by our friends at Alvarez and Marcel. Massive thank you to you, Jonathan. Thanks, Chris. I enjoyed that. It was great. Don't forget to subscribe to the podcast, tell your friends and family, and follow us on social media. That's all for this episode of the Dealmaker Uncut Podcast.