Why a founder on track to take his company public sold it for $110 million in cash instead

Razor Suleman

Achievers founder Razor Suleman.

To reward their employees for their work, companies used to give out grandfather clocks and gold watches as gifts.

But Achievers, an enterprise software company from Toronto, has a different approach to rewarding employees.

"Rewarding people for time doesn't make the most sense - what if you could reward them for performance, for hitting their sales goals or for providing great customer service?" Achievers founder Razor Suleman told Business Insider.

Companies like Microsoft, 3M, and Samsung use Achievers' social network-like platform to align their employees with company values, help them achieve their goals, and recognize them for their contributions. Achievers' social recognition feature lets employees share their accomplishments on social media and lets them rack up points that they can then cash in for tangible rewards like vacations and electronic gadgets.

On Tuesday, Suleman sold his 13-year-old company to Blackhawk Networks for $110 million in cash.

After founding Achievers in 2002 (the company used to be called I Love Rewards), Suleman bootstrapped his company for the first five years of its existence. In 2007, Achievers raised its Series A, followed by a Series B round in 2009. In 2011, Sequoia Capital's Alfred Lin led a $25 million investment in Achievers - the storied Silicon Valley VC firm's largest investment in HR tech at the time.

"Lin was the COO of Zappos, so he got culture and values, so when he saw that Achievers had built software similar to how Zappos ran their culture there and was making it available, it was a good investment to them," Suleman says.

Screenshot/Achievers

Achievers is used by companies in 110 countries. It has 240 employees at its offices in the Bay Area and Toronto, and though Suleman says it's not profitable, Achievers has a $100 million gross billings run-rate.

It had been four years since Achievers raised its Series C from Sequoia, and the company had gotten inbound interest from growth-stage and strategic investors who wanted to participate in the company's Series D round. And Suleman says his company was "definitely on an IPO path." Achievers had brought in former PeopleSoft CEO Craig Conway, who sits on Salesforce's board of directors, to help it explore going public. "It took me like a year to recruit him, really to set us up to go public," Suleman says.

So why sell the company?

Suleman says that, ultimately, Blackhawk just made an offer too good for him to refuse. "They really made it compelling by keeping Achievers independent, keeping the team on board, keeping the brand. They were already a public company," Suleman says. "It was a really good fit, ultimately, with Blackhawk. They do a lot of payments tech. They do tech for gift cards and mobile wallets. It was a vertical they were really passionate about. We'd had a relationship with them for years. Maybe we could grow faster, make our customers happier, grow at a global scale faster if we were doing this as part of Blackhawk."

Achievers started talking to Blackhawk about a possible acquisition back in January. In April, they signed the term sheet. And on Tuesday night, the deal finally closed. And Suleman couldn't be happier about it.

"It's a little surreal to sell your baby. It's exciting," he says. "Achievers started off as a little vision, a little opportunity. It's been a crazy ride for the past 7 or 8 years. I just feel really grateful."