With its current investors looking for an exit—and potential investors eyeing a sector poised to grow—Colorado-based HomeSphere secured financing and completed a management buyout last month, giving the company new ownership.

The deal was completed October 1 and announced at the end of the month. The company's new CEO, Glenn Renner, first joined HomeSphere in 2004 as senior vice president of marketing and was elected president in 2008. Jim Waldrop, the company’s founder, moved to the role of chairman of the newly-formed Advisory Board.

Glenn Renner

The company—which provides a digital B2B customer acquisition and retention platform—had multiple investors, including venture capital firms, and Renner said it became clear those firms were looking for an exit.

“In the life of any of their funds,” Renner said of the firms, “they do look for an exit event and we really felt that, combined with where we were in the market and the timing, that it was an opportunity for them to look for an exit. That was really what started the process.”

HomeSphere hired New York City-based investment bank East Wind Advisors to oversee and provide guidance on the deal. After a few companies inquired, Renner said, HomeSphere selected Cypress Growth Capital to provide funding for the management buyout.

According to Renner, HomeSphere went with Cypress because of its unique business approach: Royalty-based growth capital, which provides capital in exchange for a fixed percentage of a company’s future revenue. The company pays the royalty monthly until its total payments reach a cap, expressed as a multiple of the investment amount.  Financial details for this deal were not disclosed.

Once HomeSphere received a letter of intent from its investors, Renner said, it immediately looked to secure funding.

“We’d like to keep the company together,” Renner said of he and his colleagues’ thought process at the time. “We think we’ve got the right vision for the company, so we think that we could put together an offer that would match or beat the offers on the table.”

The company has doubled its customer base since 2012, said Renner. “The market is responding to what we’re doing. We think we’ll continue to grow organically,” he says.

HomeSphere now connects more than 80 preferred building product manufacturer brands across 23 product categories with more than 17,000 local and regional home builders, according to the company. One reason for the growth, Renner said, is the focus on technology in the industry.

“Going all the way back to 2007 when the downturn really started,” he says, “us being a technology service provider, we really had a lot of conversations about where we thought technology was going, where would it go in our industry. Of course, today, it’s more prevalent than we ever dreamed.”

In a press release, Renner said the deal is a significant milestone in HomeSphere’s continuing evolution. “Management is committed to growth and innovation,” he adds, “and our new structure will enable HomeSphere to expand its product offerings and provide additional value-added services to the home building industry."