Now part of CyberSource (Nasdaq: CYBS), Lightbridge was founded in 1989 as a provider of software and services that enabled wireless carriers to increase revenue, productivity and customer loyalty.
The company’s real-time transaction processing, call center, fraud detection and data mining solutions supported the complete customer lifecycle from customer acquisition, risk management, prepay and replenishment to customer relationship management and retention.
Advent first contacted Lightbridge in early 1994 as part of a proactive deal-sourcing effort in the wireless services industry. Over the next two years, we developed a strong relationship with the company’s management team and co-founder.
In early 1996, we negotiated an investment in Lightbridge on an exclusive basis and were the only private equity firm considered by the company, despite the expressed interest of several other investors. Lightbridge decided to partner with Advent because of our investment experience and contacts in the wireless industry and international capabilities.
We believed the business had enormous growth potential, driven by the explosion in the number of mobile subscribers, strong need for wireless carriers to outsource non-core business activities, and the signing of the company’s first multimillion-dollar national contract with a tier one carrier. We also saw numerous opportunities to support the company’s international expansion.
In September 1996, only six months after our investment, Lightbridge completed a successful IPO on Nasdaq. Optimistic about the long-term growth prospects for the business, we remained an investor for three more years.
We helped Lightbridge build its franchise in Europe and Latin America by introducing the company to one of our strategic corporate partners – a major European carrier – and one of our portfolio companies – the largest independent credit-card processor in Brazil. We also worked with Lightbridge to refine its e-commerce strategy, complete an acquisition and recruit senior management team members.
During our investment period, the company clearly established itself as the leader in its industry, with revenue and net income growing over 370% and 300%, respectively, from 1996 to 1999.