Here is Why We Selected Mainsail Partners in a Very Competitive Process for FairWarning
Today, I am thrilled to announce FairWarning’s decision to accept $60 million of growth capital after 13 incredible years of growth and profitability. I want to offer a few thoughts as to why we have taken this path, and why we are more excited than ever to expand our vision of trust through data privacy and security.
FairWarning was purpose built in 2005 to focus on the underserved niche of healthcare privacy and security, which at the time, was visionary and many years ahead of the market. We knew that FairWarning could create tremendous value for care providers through a focus on customer-success, thought leadership, innovation, and company values that aligned with the people of the healthcare industry.
Over the past decade, this vision was realized, as we have enjoyed growth and profitability while helping tackle some of healthcare’s biggest privacy and security challenges. We did this by listening to our customers. We’ve met the market’s needs with solutions like Patient Privacy Intelligence, which have received patents around the world. We innovated with our Software-as-a-Service offering, Managed Privacy Services, Identity Intelligence, Intelligent Filtering, Automated Incident Response and our FairWarning Ready Certified training classes on site here at FairWarning.
To no surprise, the after-hours training receptions where everyone loosens up with a glass of wine or two are the most popular part of training, connecting with colleagues and peers from around the country and globe to discuss challenges and solutions to data privacy and security.
Along the way, together with our customers, we have caught all kinds of people behaving badly and misusing patient data (we will release a report in the near future from our MPS team, which alone has remediated over 5,400 confirmed incidents – from snooping to IRS tax identify theft, prescription fraud, opioid diversion, external attacks, and more). Very importantly, we have continued to be a big assist in getting our healthcare customers through their OCR audits. It’s incredibly rewarding to hear about another customer who successfully used FairWarning to go through an audit without a finding.
Today, healthcare has turned into a global market full of big challenges, but also big opportunity. And because we are the market leader in our category of Patient Privacy Monitoring (as recognized by Black Book Market Research Award) our customers want to solve these problems with a brand they know they can trust. We see our partnership with Mainsail as an opportunity to grow our product line and deliver more value to the market, faster.
Additionally, over the past several years we have focused on bringing our offerings to markets outside of healthcare. Our partnership with Mainsail gives us the opportunity to scale this initiative with more capital, and more talent.
To give you some context, I filed for patents on securing Customer Relationship Management Systems as far back as 2006 and had my eye on securing data held in Salesforce and cloud applications once they produced the “audit trails” our technology leverages. Ironically, Salesforce came to us in late 2013 to bring FairWarning technology to their world-leading CRM customer base, as they had heard of our success in healthcare. We worked together to release the solution alongside Salesforce Shield in 2015. The patent on securing CRMs was granted in 2016, and everything started coming together for our cloud security offering which we initially called “FairWarning for Salesforce”, not the most creative name but it was clear enough.
In 2017, our healthcare business continued to grow, we added in artificial intelligence into the filtering of false positives and we began modeling drug diversion scenarios using artificial intelligence techniques. Our Managed Privacy Services business was also being adopted by very large customers and our FairWarning for Salesforce business was really taking off, enjoying triple-digit growth with health, wealth, and banking companies around the globe. So, we had a couple of tigers by the tail.
It really began to sink in that we could grow FairWarning even faster by accessing world-class expertise to match the scale of both the healthcare and cloud security markets. We have been profitable for ten years and generated our own cash so a partnership with institutional capital would really be about getting world-class talent involved in a few key positions. We also already have a great team, but we were all in agreement, we could do more, faster with more talent. And of course, it’s always great to have access to even more capital. So, we began organizing a partnership process in June 2017, kicked it off in full in October, and had 50 initial expressions of interest to partner with FairWarning, which we then whittled down to a small handful at the end of Q1 2018.
There is one firm that stood out above all others at every stage of the process and that was Mainsail Partners. Because of their focus on Founder-led, bootstrapped business, they understood the DNA of FairWarning and worked hard to show it. Michael Anderson was and is the Partner we worked with and he introduced other members of the Mainsail team like Taylor McKinley and David Farsai, and together they brought fantastic advisory talent to the table and made a competitive compelling offer that made it a relatively easy choice for us. The deal has been closed a few weeks now, and we are off to a phenomenal start together.
We envision growing trust around the world in the areas of health, wealth, and banking through securing electronic health records, customer relationship management systems, as well as applications of all kinds, most certainly including cloud applications like Salesforce.
More than anything, the team at FairWarning is thrilled to be partnered with Mainsail Partners because while we are all in business and certainly want to reward our shareholders for their belief in us, we all want to make the Earth a better place to live, and we have the opportunity to do that by growing trust in health, wealth and banking.
Kurt J. Long