The UK Microsoft partner that has struck gold in the Middle Eastern market

Microsoft partner Innervate has come from the brink of bankruptcy to opening its first international office in less than three years

Leicester-based Microsoft partner Innervate has celebrated a comeback from bankruptcy with the recent opening of an office in Bahrain.

The office marks the first international expansion for the Microsoft Dynamics Gold partner, which was facing insolvency two and a half years ago.

CEO Andy Startin describes the company as a "35-year-old startup"; founded by Peter Lloyd in at Heathrow Airport car park before being acquired by US SI Ciber in the early 00s.

When its parent company filed for Chapter 11 bankruptcy in a US court in 2017 and its North American and Indian operations were sold off to HTC Global, the UK business was effectively "abandoned", according to Startin.

"Chapter 11 bankruptcy restricted any of the UK's financial contributions coming back to the UK so that money was frozen," he explained to CRN.

"The local management team in place at the time had a choice to make: go into administration, with the loss of a significant number of jobs, or try to rescue the business and make it trade profitably.

"I made the decision to take the hard route; I was quite keen that my colleagues remained employed."

Startin (pictured below) became the default leader as the American management team "scattered" when the bankruptcy was filed and led the sales process with PwC to find backers interested in the UK operations as a standalone business.

He and the management team undertook an MBO with private equity-backing, and then a year ago did a complete MBO with the help of founder Lloyd.

Innervate now has offices in London and Bahrain as well as its Leicestershire headquarters, and has a 50-strong headcount.

The Bahrani office comes as a result of growing success in the Middle Eastern region, with Innervate claiming responsibility for the single biggest roll-out last year of Microsoft Dynamics customer relationship management (CRM) software to the region's financial services industry.

Its presence in the Middle East is both a part of its growth strategy and also a happy accident, explained the CEO.

"A couple of years ago, we were looking to win a contract with SABB, a subsidiary of HSBC, and the third biggest bank in Saudi Arabia," he elaborated.

"We've been working with SABB for two and a half years now and having personally spent a lot of time in Riyadh; we couldn't help but have a look at the market out there and in neighbouring Arab countries.

"The governments and rulers of the countries are ploughing massive support and investment into the modernisation of banking and insurance and that, of course, requires technology. With our experience and market opportunity, it made sense that this was a market for us to look at.

"The population is hungry for technology and that is driving businesses to provide that tech to customers."

Startin added that the Middle East currently contributes ten per cent to Innervate's total revenue, but that it is a prime market to achieve its ambition of 35 per cent growth in the next three years and "will outgrow" its UK business within the next five years.

The company doesn't make public its finances, but the chief exec has ambitions of hitting £20m revenues in that timespan.

"We are smaller than we were two years ago, we had to be smaller because we are not being underpinned by a massive global $1bn organisation and I want the UK to get back to those levels," he said.

"Our investment in the UK is equal to what we are putting into the Middle East. What we have done in the UK since securing independence from US parent is that we have learned to walk on our own."