Suggestions
Scott Middleton
CEO at Terem | Building, buying and investing in tech companies
Scott Middleton is the Founder and CEO of Terem, a technology product development firm based in Sydney, Australia. He established the company in December 2011 with a vision to provide innovative solutions for tech ventures and enterprises, focusing on accelerating product development and enhancing business strategies. Under his leadership, Terem has grown to work with notable clients such as Qantas, Immutable, QBE, and the Australian Taxation Office (ATO) .123
Professional Background
Scott has extensive experience in the tech industry, having been involved in the launch and growth of over 61 products and publishing more than 120 articles and videos that have garnered significant attention .1 His career began early; he started programming at age 12 and sold a game globally by age 14. Throughout his career, he has held various roles that combine commercial, technical, and product expertise, which he leverages at Terem to deliver disruptive outcomes through small, agile teams .23
Terem's Mission
Terem aims to provide comprehensive support across the tech product development lifecycle, encompassing strategy, product management, engineering, and more. The company has evolved from its original focus on software engineering to include broader business model development and strategic consulting .13 The name "Terem" itself is derived from a Hungarian word meaning "to yield" or "to produce," reflecting Scott's commitment to fostering growth in tech businesses .1
Notable Achievements
- Fast Growth Recognition: Terem has been recognized as one of the fastest-growing companies in Australia on multiple occasions .2
- Innovative Partnerships: Scott emphasizes collaboration with clients to create tailored solutions that meet specific market needs, which has been a key factor in Terem's success .3
Scott Middleton continues to be an influential figure in the Australian tech landscape, advocating for the power of small teams in delivering significant technological advancements.
Highlights
Raised $5m. Acquired for $11m. Sold for $3m.
This is the journey of telehealth startup GP2U. 👇
Context In 2021 fueled by COVID, listed UK telehealth company Doctor Care Anywhere (DCA) was going through rapid 100%+ annual revenue growth but posting significant net losses.
Tech stocks were riding high valuations and telehealth had break out growth.
The Acquisition The key terms for DCA’s acquisition of GP2U in September 2021 were:
- $3.3m in cash on completion (upfront)
- $7.7m in shares at $0.73 per share (escrowed for 12 months)
- No deferred or earn out consideration
The Spinout GP2U was spun out of DCA in July 2023 and sold to My Emergency Doctor. The key terms of the sale were $3m in total consideration, made up of:
- $2.5m shares in My Emergency Doctor
- $0.5m in cash
So, what happened?
Macro changed By late 2022 and early 2023 unprofitable technology and growth stocks had started to see significant declines in valuation and COVID no longer posed the threat it once had.
These macro pressures combined to mean telehealth had fallen out of favour. People were back visiting their doctors and no longer forced into consultations by video.
Review of Strategic Rationale When DCA acquired GP2U it’s key reasons were:
- Entry into the Australian market
- GP2U’s rapid growth
- Accretive gross margin
- Additional growth for GP2U only requires “modest” investment
- Operating costs are immaterial to DCA
The image attached to this post shows a review of how these reasons played out.
Results for Shareholders GP2U’s prior valuation was most likely around $8-$15m. As a whole shareholders likely saw 50% of this back after escrow and DCA’s share price dropped.
DCA shareholders almost certainly derived no value from owning GP2U, in fact they likely paid hundreds of thousands in costs for the transactions and GP2U losses they had to cover.
