Martin McKay started texthelp in 1996 after seeing his father struggle to communicate following a severe stroke. He developed assistive technology to help people with profound communication and dexterity problems.
He soon learned that there was a much wider market – what he was doing to help people communicate was also very helpful for people with dyslexia. He built a dyslexic spellchecker and gradually introduced it to his principal market at the time – UK universities.
But as the business grew, expansion had to be international. “If you want to grow a decent sized business in Northern Ireland, you’ve got to have an export mindset,” he says. And export he has – today the UK and Ireland account for approximately 25% of revenues.
The company began to hire people in the US from the early 2000s but progress was a long, steady and “not particularly stellar” slog for the next ten years. texthelp’s market traction really took hold in 2015 after the company became a partner with Google to provide the first dyslexia tool on its newly launched low-cost Chromebook laptops. Suddenly and rapidly, texthelp gained millions of users. (Today, two-thirds of Google Chromebooks in UK education are deployed with Texthelp tools.)
It also forced a change in its business model – as Chromebooks were cloud-based texthelp had to convert to a SaaS model.
It was one of several inflection points in that period. Although McKay was the founder, the business had hired a CEO after an early venture capital funding round. But after years of generating consistent profitable growth, his CEO wanted to retire – and early investors were keen to exit.
A transaction in 2018 led by LDC deal enabled this exit and McKay then stepped back up to be CEO. “It was a leap of faith by LDC because we were two-thirds on the way to becoming a SaaS-based business,” says McKay.
The transition worked, creating instruments and metrics that enabled McKay and his team to track the business in ever greater detail. This better information improved the business and gave McKay confidence “to think bigger and go faster.” In 2020, texthelp raised a fresh round of private equity – this time from the UK and the US funds of Five Arrows, the private equity arm of Rothschild & Co. “They have been incredibly supportive,” says McKay.
The new investment enabled texthelp to embark on a transformative M&A programme. The company has since doubled in headcount – it now employs 370 people – and doubled in turnover – to over £60M – with five transactions bringing seven companies into the fold across Denmark, Norway, Sweden, the UK and the US.
“This is a niche market so rather than spending too much time and energy competing with each other, we want to get everyone in the same boat and fully work together,” says McKay. And with scale comes efficiency. “Products that help dyslexic people have a lot of commonality,” says McKay, “so we can pick the best grammar technology, the best spelling technology, the best word prediction technology and share that across the group so our product quality increases and we have a more efficient engineering system.”
The range of tools has expanded: Equatio enables teachers to make maths accessible; ReachDeck assesses content for ease of understanding.
The Five Arrows investment also led to significant changes in the composition of the leadership team. “I left university and started this company,” says McKay, “so it has been important for me to bring in talent from larger, established enterprises. I have been good at recognising that I don’t have all the answers and there are many better people around to do this than me.” More than half of texthelp’s senior team have been hired in the past two years, drawn from corporations such as HP and Microsoft and with considerable scaleup experience.
The majority – roughly 70% – of the product engineering takes place in Northern Ireland. “There’s a good tech hub and we recruit directly from universities here but we still need more graduates. The bottleneck is the number of people who choose to do computing in the first instance. We need more students selecting a career path that takes them into the software industry.”
McKay says that he is paying for an A-level computing teacher at one particular school “because the position won’t be funded until the demand for seats in the class has been demonstrated – and it will take two years to prove that demand. If we can get 20 students each year doing A-level computing, then that will be 20 more potential candidates for the software industry.”
There are no shortages of growth opportunities.
Firstly, there are texthelp’s core markets.
“Currently we are in 20% of schools in the US and we want to double that. We could double the business just by improving or market penetration in North America education alone.”
The second driver for growth is texthelp’s move into the workplace market. Companies such as Tesco, Virgin Media and easyJet have partnered with texthelp. It’s an area that is growing rapidly, says McKay.
He also points to adjacent areas in special educational needs such as ADHD in which texthelp can develop new products.
Finally, there are huge potential markets such as Latin America, Africa and India where the ed tech sector is just waking up –
“and we want to be there with a coffee when they do, because when technology comes to classrooms that are still only using blackboards then those markets will grow rapidly”
“Currently we are in 20% of schools in the US and we want to double that. We could double the business just by improving or market penetration in North America education alone".
Martin McKay, CEO
