PROFILE: Meet the SA-born man behind Mimecast
Mimecast co-founders decided to bet on the internet going mainstream and to help companies manage e-mail and data security
Once a quarter, when Nasdaq-listed Mimecast fields questions from investors about its results, co-founder and CEO Peter Bauer finds himself having to explain the e-mail and data security company’s strong presence in SA.
Those who don’t recognise his Eastern Cape accent tend to be the most puzzled.
"Investors normally raise their eyebrows when they see how significant [SA] is — they’ve never really seen a public company in the US with such a significant SA business; it’s about 15% of our revenues today," Bauer says by phone from Mimecast’s North American headquarters in Boston.
"Obviously, the currency fluctuations are normally what need explaining — the pound and the rand have moved around a lot relative to the dollar, so each quarter we do have to explain."
Fortunately, it’s easy to unravel. Bauer and co-founder Neil Murray (also a South African) have used the country as a gateway into the rest of Africa and the Middle East.
In any case, investors don’t seem too perturbed. Since listing in late 2015, Mimecast’s share price has nearly quadrupled to about $40, valuing the firm at about $2.3bn.
The company has come a long way since Bauer and Murray, its chief technology officer, founded it in London in 2003. Bauer was 29 at the time.
The duo met soon after Bauer, who grew up in Butterworth and Port Elizabeth, moved to the UK to set up sales channels for SA software products.
"Within a few months, we realised that by selling other people’s stuff, we’d have less control over our destiny than if we set up shop ourselves."
They’d already had some success in the start-up scene, having built and sold tech companies in SA in the 1990s — sales that gave them seed capital for their new, more ambitious venture.
In Bauer’s case, he and another friend had started a business in Cape Town called Fab Technologies, which they sold to the then JSE-listed Idion Group for about R20m in 1998. "That gave me a taste of blood, of what could be achieved."
He and Murray decided to bet on the internet going mainstream, and launched a company aimed at helping firms manage e-mail and data security. This was at a time when many doubted whether e-mails would stick around.
"Neil’s a fantastic software architect, and I scrub up reasonably well in a suit and can ramble on endlessly before you buy something," says Bauer, who recalls being both mesmerised and sceptical about the world wide web when he first came across it.
Like most entrepreneurs with grand plans, Bauer admits that "you have to be slightly delusional to start out something like this".
"Normally, being delusional is a bad thing, unless you persist with it long enough for you to find your path … and we did believe what we were trying to do was worthwhile."
A decade and a half later, and Mimecast is being handsomely rewarded for being an early mover in the security space. E-mails are clearly here to stay and, with that, phishing attacks are proliferating.
"For the most part, Mimecast has grown organically, we’ve not done much by way of acquisition. But we recently announced two acquisitions, and we also launched a whole new product module around web security, using the platform we built for e-mail.
"That’s in a public beta, or "beyta", as I have to say in America. We’re really excited about that — we have tons of customers interested and trying out that product, and we’re hoping to start selling it later this year. We’ve had some real interest from SA companies."
Unlike Elon Musk, another SA-born CEO in the US, Bauer’s company has mostly flown under the radar of short sellers, the expanding group of investors who aim to profit from declines in companies’ share prices.
"But I think this is a regulatory thing that has to be addressed — they get to take short positions and then they can generate ‘fake news’ to suppress the share price of the company and then collect on the way out … It’s sort of the reverse of the pump-and-dump scams, which are obviously highly illegal."
Where fake news is deliberately spread to generate profits, "people should go to jail", Bauer says. "It’s not just ripping off investors and stealing people’s money, but it really damages companies and has a real impact on people’s lives — on employees, on reputations, on customers’ perceptions of brands."
Bauer and his wife would be keen to spend more time in SA, the transformation of which has been "fun to see".
"Maybe in time we’ll spend several months a year in SA," he says, "that’s definitely something we aspire to."