Started by alums of Case Western Reserve University in 2014, Scout RFP—offering online tools and services to streamline sourcing and an array of business dealings—was sold for $540 million in cash, the San Francisco-based company announced Monday.
The purchase marks the second significant entrepreneurial “exit” by its two young founders, Stan Garber and Alex Yakubovich—both 2007 graduates of Case Western Reserve who grew up together in Cleveland’s eastern suburbs. Just five years later, they sold their first business—national online-based food-ordering startup, ONOSYS—that they’d started while university students.
Scout is being bought by Workday Inc., a San Francisco-area company that creates applications to manage finances, human resources, analytics and planning needs for large businesses and government agencies. The deal is slated to close in late January 2020, given regulatory approval and other conditions.
“This is a huge success for our alums at Scout and their entire team,” said Todd Schwarzinger, interim executive director of the university’s Veale Institute for Entrepreneurship. “It’s inspiring for our students to see young entrepreneurs from Case Western Reserve leverage their skills and connections toward such an outcome.”
“As students, we found mentors who have helped us nearly every step of the way,” said Stan Garber, Scout’s president, who earned a bachelor’s degree in finance from the Weatherhead School of Management. “As alums, we’ve found the CWRU network to be full of successful people who want to help other people.”
The Scout team includes co-founders Chris Crane, a 2008 graduate with a bachelor’s degree in mechanical engineering, and Andrew Durlak—its vice president of operations—and 2007 graduate with a bachelor’s degree in management from the Weatherhead School.
With more than 160 employees in North America and Europe, Scout’s offerings have been used by nearly 300,000 people in more than 150 countries; customers include Smucker’s, Levi’s, Zappos, Best Buy, Dish Network, Adobe and many others.
Garber and Yakubovich—Scout’s CEO who graduated with a bachelor’s degree in mechanical engineering from the Case School of Engineering—credit their company’s success to designing its platform to be immediately useful and easily adopted for a variety of purposes, be it aiding the intake of new projects, sourcing supplies (also known as procurement) and managing contracts.
“Make magic happen”
This customer-centered approach has been a hallmark of their entrepreneurial pursuits; persistence is another: As university students, their drive to start a business led to free office space, professional guidance and a host of valuable connections—they were introduced to a key early supporter and ongoing funder, venture capitalist Lee Zapis, by CWRU LaunchNet Director Bob Sopko.
In the years since, they have attracted funding from such prominent firms as Google Ventures, New Enterprise Associates, Menlo Ventures and many others. Key Cleveland funders invested in Scout early, including Zapis and seed investor, Morris Wheeler, of Drummond Road Capital.
“I tell students: In college, you have such a unique opportunity,” said Garber. “Find people who are not your same background, complement your skills and make magic happen together—and that’s especially true at Case Western Reserve.”
Before enrolling at the university in 2003, Garber and Yakubovich—both graduates of Mayfield High School—had already started a web-design company, which put them in touch with restaurants in Northeast Ohio. Soon, the then-CWRU students—which included Oleg Fridman, a 2007 CWRU graduate—were building tools for ordering food online, leading to the founding of ONOSYS.
While at CWRU, Garber also helped start the Weatherhead School’s Wolstein Society and cites being mentored by its namesake Scott Wolstein as influential to the success of their businesses.
Eventually, ONOSYS expanded to provide its services nationwide, building a workforce of more than 20 employees, before being bought by LivingSocial in 2012.
Since graduating, Garber and Yakubovich have kept in touch with their professors and often speak to classes taught by Michael Goldberg, an associate professor innovation and design at the Weatherhead School.
“They’ve always been as helpful as can be at CWRU,” said Scott Shane, the A. Malachi Mixon III Professor of Entrepreneurial Studies at the Weatherhead School, who taught Garber in an undergraduate entrepreneurship class. “They’re willing to meet with student entrepreneurs and share their experiences.”
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