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01732 759725 44 Q&A support,” he said. From that point, with no customers – not even a desk – Vapour Cloud has gone on to become the sixth fastest growing tech firm in Leeds. It is growing at an average of about 50% per year and is currently turning over in the region of £4 million per annum, of which about 95% is recurring revenue. Today, Vapour Cloud employs around 21 people, and it is to them that Mercer attributes much of the company’s success. “Any business owner will tell you the most difficult thing is getting the right people in the right roles, doing the right jobs. We’ve got a really tight-knit family now: lots of technical people and operational people who have been here a long time. The customers know them and trust them, and they know the customers inside out and back to front,” he said. Technology Reseller called Mercer in the second week of April, not long after lockdown had begun, when he was still processing what the pandemic might mean for Vapour Cloud and its customers. We started by asking him about the role of private equity in Vapour’s success. If this year had all gone to plan – and it still might – Vapour Cloud would have been celebrating its seventh year in business and an MBO to kick-start the next stage of its development. The venture capital-backed, Elland-based network and cloud services provider broke even earlier this year and, with a record billing month in March (nearly £500,000), was well placed to reward its original investors and push on to even greater things. Vapour Cloud was founded by CEO Tim Mercer, who, following a career in the Army, including service in Northern Ireland and the Gulf War, started working in telecoms with Telewest (then NTL Telewest) and Virgin Media for Business. He started one company, partnering with a mobile business owned by friends, before, in 2013, setting up Vapour Cloud with venture capital and money raised from the sale of his family home and his wife’s car. “We set it up with venture capital because we wanted to run our own network in the UK. Owning the infrastructure is important for supporting your clients – you can give a better level of Technology Reseller (TR) : You have already told us of the importance of private equity to the success of Vapour Cloud. Is the company still backed by private equity? Tim Mercer (TM): We are. The people who backed us from day one are still in and we’ve got a slightly bigger shareholder now called Seneca, which came in in the Series B round. The plan was to look at doing an MBO this year and to take those original private equity boys out and go with a bigger firm to grow the business quite significantly in 2021. How that is going to work now I don’t know. The beauty of our business is that we have high recurring revenues and not a lot of one-off sales. In general, our revenue is billed every month, and that’s the kind of business the private equity boys like. TR : Has your business evolved since you set it up or have you stuck to your original vision? TM: We’ve stayed true to our core vision. Seven years ago we knew the development of cloud was coming and we knew that if we owned the network, if we built the infrastructure and if the application we wanted to deliver to a customer sat on our network, we could control it. We knew that if we owned the wire that goes into a business premises, over the years people would put more services down it. Voice was a big play for us. We knew that voice would go into that space and we knew that people had a bad recollection of VoIP services because they were delivered over an internet service with no quality. We built a network that allowed us to put in quality and to manage that effectively. Then we put in some back-up and some storage, so people could store their data. We built the wire, we built the internet pipe, we built the voice platform, we built the back-up and storage platform. We do video now, but in the early days those were the three core basics. We went to the investors and said ‘Look, if we build this network, we own the customer. If we get two or three services down that wire it is really difficult for that customer to move’. With Tim Mercer, CEO, Vapour Cloud Q&A Tim Mercer