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How WatchWire Used Debt Financing to Achieve a Successful Exit
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How WatchWire Used Debt Financing to Achieve a Successful Exit

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Catherine Daly
Content Strategist
WatchWire Team

WatchWire partnered with TIMIA Capital in 2021 to receive a USD $2.5 million investment facility to help them reach their end goal — a successful exit — without diluting equity.

WatchWire (previously EnergyWatch) strategically used debt to fuel business growth and was instrumental in WatchWire’s successful acquisition in 2023 by Tango Analytics, a cloud-based real estate and facilities management software company backed by Berkshire Partners.

TIMIA caught up with Andy Anderson, former CEO of WatchWire and new EVP of Energy & Sustainability Solutions, to hear about the company’s exciting new future with Tango.

Andy Anderson

The WatchWire Journey

Established in 2000, WatchWire was among the first energy consulting and procurement advisory firms in the deregulated energy market in New York. 

As the space evolved — and environmental concerns began to play a broader role in corporate operations — WatchWire spotted a gap in the market for a SaaS-based platform that could address the common challenges faced by its customers. 

When it pivoted its focus from consulting to platform development, WatchWire bootstrapped for several years, building a robust team and culture, testing the platform’s product-market fit, gathering customer feedback, and honing the technology. WatchWire’s platform helps clients make sense of non-standardized sources of data and multiple sustainability reporting frameworks to meet increasing regulatory, investor, and stakeholder-driven demand. 

In the past few years, WatchWire solidified itself as a leader in sustainability and energy management and carbon accounting — which caught the attention of larger players and private equity firms that were looking to move into the space via acquisition. 

How Debt Financing Fueled Growth

Cleantech is an exciting industry for investors, so WatchWire had plenty of options when it came to investment partners in 2021. The executive team was certain about one thing — it wanted to avoid more dilution of the business, so it sought debt financing over equity. 

WatchWire’s Cleantech

For WatchWire, debt financing was a strategic choice. It allowed them to retain control, safeguard their original vision, and manage the company’s growth on its own terms. After a comprehensive review of debt providers, the team selected TIMIA Capital and went through the usual debt application and due diligence process

“Non-dilutive capital was key for us. It’s simply much cheaper capital. Even if it’s just a bridge to something bigger like a larger VC round, TIMIA’s investment will help us get to the next stage without giving up more of our company,” said Andy.

Once WatchWire received the funds, the team set about putting the capital to work in two areas:

1. Pipeline Growth

WatchWire used debt to invest in the people, processes, and technology to meet its client and partner needs and, as a result, grew its pipeline by 40%.

2. Increase Close Rate

WatchWire used debt to increase investment in product-led growth — including self-service improvements to open up opportunities in the high-volume SMB space — and almost doubled its close rate.

WatchWire’s clear vision for the company and its strategic deployment of debt capital helped it achieve its goals in just under two years.

“We basically took the capital from TIMIA and did everything we said we were going to do with it. The debt effectively acted as a bridge to where we wanted to get to.” 

Successful Exit

Once WatchWire had achieved everything it set out to do with the debt capital, it met with an investment bank to determine the next steps.

The cleantech industry is hotter than ever for investors. Considering WatchWire’s trajectory, customer logos, and growth rate, the company was in an enviable position for a startup — it had multiple interested options, including growth equity, private equity, and venture capital.

In the end, it decided that the acquisition by Tango would have the best outcome for all stakeholders. Founders and early investors monetized from the deal, the management team that held equity in WatchWire took some money off the table and rolled some into the new company, and all ~40 WatchWire employees moved into a new 300+ person organization that delivers career opportunities that the smaller business could not provide.

Tango’s established market presence and Berkshire Partners’ backing promise a bright future for WatchWire’s team.

6 Tips for Growth Stage Startups

Andy Anderson provided some valuable insights from his experience with WatchWire to help other startups navigate their growth phases.

1. Balance Urgent with Important

Drawing inspiration from the Eisenhower Matrix, WatchWire’s leadership carefully balanced urgent tasks with important tasks, ensuring that, while they were meeting immediate needs, they never lost sight of their long-term objectives. 

The Eisenhower Matrix

2. Get Your Accounting in Order

Prioritize adequate planning and budgeting to ensure fiscal responsibility and ensure your accounting is accrual-based so you have a full picture of the financial health of the business.

3. Understanding Your Metrics

For SaaS startups, understanding and tracking metrics like Customer Acquisition Cost (CAC) and Lifetime Value (LTV) is key. These metrics provide insights into the company’s health and future potential.

4. Choose the Right Financing Method

Understand the pros and cons of each financing method, be it equity or debt, and pay close attention to financial covenants in any financing agreement. For WatchWire, debt financing allowed the company to maintain control, grow on its own terms, and achieve its goal, putting it in an excellent negotiating position for an exit.

5. Choose Partners Wisely

When deciding on partnerships or acquisitions, select entities that offer more than just financial benefits. For WatchWire, Tango wasn’t just another option; it presented an opportunity to address broader goals and was a complementary fit for all stakeholders in the business.

6. Know When You’re Ready

Timing is everything. Understand when your company is at the right stage, has achieved product-market fit, has gained enough traction, and is ready for the next step, whether that’s debt financing, partnerships, or an exit.

The Future of WatchWire

WatchWire’s journey is a compelling case study for tech startups contemplating their next financial move. The company’s journey and successful exit to Tango demonstrate the potential of debt financing when used with precision and foresight.

The WatchWire-Tango merger is evidence of the power of vision, strategic alignment, and seizing the right opportunities at the right time. As the combined entity moves forward, we look forward to following the next wave of innovation and transformation they deliver.

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Catherine Daly
Content Strategist

Catherine joined TIMIA Capital as a freelance copywriter and social media manager in January 2019. She has 15 years experience in marketing and held senior positions at a number of technology companies including Hootsuite, Absolute, and Avnet Technology Solutions. Catherine is an expert writer and marketer and holds an executive Masters in Marketing, a Bachelor of Science in Communications and Journalism, and a Diploma in Digital Marketing.