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Employees’ stock options were cancelled, according to a document viewed by TechCrunch.
Canadian individual equity firm PartnerOne has acquired HeadSpin in a fire sale , TechCrunch has learned exclusively . And most of its former employee find nothing for their option , allot to multiple root . HeadSpin is the peregrine app testing society whose father wassentenced to prison for fraudearlier this twelvemonth .
In total , HeadSpin evoke $ 117 million since its 2015 origin from investors such as Google Ventures , Iconiq , Dell Technologies Ventures , Battery Ventures , Felicis and Tiger Global . It was lastvalued at $ 1.1 billionin 2020 . The party ’s ARR was around $ 20 million and the acquisition monetary value was probably between $ 20 M and $ 40 M , one former employee who wishes to remain anonymous told TechCrunch . Another former employee severalize TechCrunch the sales cost was believe to be “ cents on the one dollar bill . ” Ironically , at the clock time of its $ 20 millionSeries B raisein 2018 , investors were gasconade the company as “ one of the fastest - scaling computer software companies ” ever .
Montreal - based PartnerOne sustain on its site and to TechCrunch that it hasacquired HeadSpin , but has not disclosed the amount .
Former executive of HeadSpin , however , are not benefiting from the PE buyout , accord to several former workers .
In an e-mail get off to employee , the company shared that HeadSpin had a new plate with a PE firm , calling it “ bang-up news . ” Then 10 minutes later , according to a document viewed by TechCrunch , workers come an e-mail that all of their options , vested and unvested , were canceled because the option were “ underwater . ”
The e-mail said in connection with the buyout , that all option would be “ canceled in exchange for no consideration . ”
Although the terms of the great deal were not break to employees in this email , by announcing that choice would be subaquatic , the email indicates that the purchase toll for the party ’s shares was depressed than any work stoppage price employees were eligible to compensate .
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“ The CEO , COO and CTO were all countenance go that sidereal day . We can only speculate they got package , ” one source allege . “ But some employee who had been there for 9 - 10 year and weathered the storm through the former founder , working 15 hour day – they got nothing . ”
PartnerOne CFO Jonathan Dionne confirmed to TechCrunch that the HeadSpin direction team exited , and welcome “ very generous bundle ” but indicate they were not fired . ( His full financial statement is below . ) He claimed that PartnerOne did not pay “ pennies on the dollar ” for HeadSpin , saying “ the dealing toll and terms were accord to by the bulk of the stockholders and debt holders , many of which are the large tech companies in the human race . ”
HeadSpin ’s laminitis , Manish Lachwani , was sentenced to 18 months in prison house after pleading guilty totwo counts of wire pseud and one tally of securities fraudin April . He was also order to serve three years of supervised dismission after leaving prison and ordered to pay a $ 1 million mulct for lying to investors . A hearing on return was schedule for July 31 .
Lachwani led the caller as CEO until May of 2020 , when he was replaced by Rajeev Butani .
The New York Times reportedthat Lachwani blow up “ HeadSpin ’s revenue intimately fourfold , making false claims about its customers and create bastard bill to compensate it up . ”
PartnerOne ’s Dionne tell TechCrunch that HeadSpin was a victim of its former CEO ’s actions and that the management team in place when his firm had acquired the company had worked “ to guarantee that everything in relation to the previous chief executive officer was correct and made ripe , including returning money to investor that had been defrauded . ”
Companies use HeadSpin to quiz and monitor their apps across various geographics and machine . The company claim that it helps businesses “ ship mathematical product faster with zero end - user issues . ”
“ I believe the former c - level executives , specifically the CEO did a good job go the company out of the maw that the former CEO make but I call back overall the company was not deal in the best direction , ” one employee said . “ They were trying to catch every new customer , not really having a vision for what the company was . ”
For its part , PartnerOne believes HeadSpin was a victim of its founder ’s actions .
“ The former chief executive officer ’s guilty plea definitely closes this subject , and demonstrates that it was one person ’s actions , and not the fellowship itself , ” Dionne said . “ HeadSpin itself was a dupe , it was not the culprit . The CEO ’s guilty supplication proves this . ”
Here is the full statement PartnerOne CFO Jonathan Dionne give TechCrunch :
“ HeadSpin is a great ship’s company that was unfortunately the victim , many years ago , of the former CEO ’s activity . That time is long gone , and the direction team ( CEO , COO and CTO ) in place when we adopt the company consisted of very well known and reputable individual who engaged major law firms and advisors to check that everything in coition to the previous chief operating officer was compensate and made correct , including come back money to investors that had been defrauded . HeadSpin shareholders supported the direction ’s natural process which assured that the company was operating with complete transparence and wholeness , and with very robust safeguards to ensure that the past would never repeat itself . Actually , the mode direction handle the situation was praised by the SEC as the style a company should handle a situation where it is the dupe of one person ’s forged actions .
mate One only come to know of HeadSpin recently as part of the sale process of the company , and this was many years after the former CEO ’s actions . Our focus on the due industriousness was to ensure that there were no remnants of the former CEO ’s action which are now many years into the past . The former CEO ’s guilty supplication definitely come together this thing , and establish that it was one person ’s actions , and not the party itself . HeadSpin itself was a victim , it was not the culprit . The CEO ’s guilty plea proves this .
The management team ( CEO , COO and CTO ) were not displace , but it was rather the programme throughout the acquisition process for them to move on post - acquisition . They did a great job and had accomplished their persona at HeadSpin . They all received very generous packages as part of the dealings .
The transaction was not for “ pennies on the dollar ” , the transaction price and terms were agreed to by the majority of the stockholder and debt holders , many of which are the large technical school companies in the man . There is no way that these major corporations would agree to sell a company for less than its fair marketplace economic value . to boot , the sale process was run by a leading investment firm with a widespread market outreach and a competitive bidding process .
The young direction team at HeadSpin is frame of leaders from another one of Partner One ’s ship’s company , Evolving Systems , who have successfully put on the leadership of the troupe and have positioned it very well for the future . These person were selected because of the synergy and similarities between the various company ’ marketplace , technologies and geographical presence . It was a arrant fit .
HeadSpin has a consecrate team of 200 , plus the support of 100 of the top software program engineers in the world from Partner One companies . HeadSpin customers have incur news of the acquisition very favorably and have already begun expanding their function of HeadSpin ’s product .
Partner One never sells its companies , so HeadSpin now has a forever - home . And because we do n’t sell our companies , we make the good long term decisions for our products and our customers . Partner One has begun plans to make important investiture into HeadSpin and with the strength of our establishment behind it , customer are more surefooted than ever in HeadSpin Cartesian product .
With all the great things chance , and the former CEO ’s actions now long into the past , that chapter is closed and the hereafter is super bright for HeadSpin , its team and its customers . HeadSpin is an amazing troupe with industry - leading products . We are proud to conduct it into the next 50 years of growth . ”
Christine Hall and Marina Temkin put up to this clause .
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