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How an Austin software company got $59 million from longtime Microsoft CEO

How an Austin software company got $59 million from longtime Microsoft CEO

Social Solutions is excited to partner with the Ballmer Group to enhance performance outcomes in the social sector. Sign up here to receive regular updates on program details and matching grants that can help bring the power of Apricot software to your nonprofit or public sector agency. Read more about our partnership below, originally posted in Austin Business Journal.

Steve Ballmer, the former CEO of Microsoft Corp., first became aware of Austin company Social Solutions Inc. because he and his wife, Connie Ballmer, noticed the the charities they were donating to used its technology to measure their impact.

“Steve and Connie reached out to us after they understood we were the de facto standard in nonprofit software,” said Kristin Nimsger, chief executive of Social Solutions.

Ballmer Group announced in early August a $59 million investment in Social Solutions that will be used to grow the company and to help nonprofits pay for its software.

The Ballmers have been prolific givers recently, donating millions through their philanthropic organization, Ballmer Group LLC, to causes such as youth development and workforce training. But putting money into Social Solutions could have a major effect on the many of nonprofits that use its products.

Nimsger and Chief Technology Officer Joel Martins visited the Ballmers in December at their office in Bellevue, Washington. Steve Ballmer visited the Social Solutions Austin office in February.

The Ballmers believe a key aspect to improving “economic mobility” is access to data and the ability to analyze data by social-services organizations, said Jeff Edmondson, Ballmer Group managing director.

“In the course of our conversations, it became clear that we shared a vision” in using technology to tackle social ills, Nimsger said. Ballmer was particularly interested in collecting data from many “touchpoints” to provide “predictive analytics” and using data from “all interactions to demonstrate impact,” Nimsger said.

Social Solutions case-management software, for example, can create a dashboard that integrates a student’s school district information with community social-service resources, Nimsger said.

With inputs such as grades and attendance and using predictive analytics, a pupil identified as at-risk might be referred to a community after-school program, for instance.

Several aspects of Social Solutions impressed the Ballmers, Edmondson said.

It’s “the largest software company focused on nonprofit organizations” and its reach encompasses different types of social services, he said.

The company’s commitment to privacy, data security and the quality of the team also played a part in the Ballmers’ decision to make the $59 million investment, Edmondson said.

“We are starting with a very specific focus on deploying case-management software and analytics because it is most essential to improving services to clients,” Connie and Steve Ballmer wrote in an Aug. 9 piece in The Chronicle of Philanthropy. “Case-management software allows an organization to track which services are being delivered, to whom, and how often. It helps clarify the effectiveness of programs over time through reporting and analytics.”

Austin-based Vista Equity Partners LLC acquired Social Solutions in 2014, when the company was headquartered in Baltimore. It moved to the Texas capital last year.

“One of our core principles across the Vista family of companies is that inspired ideas, fueled by technology, can catalyze positive change at scale. Social Solutions is a great example of this,” said Robert Smith, Vista Equity founder, chairman and CEO. “The Ballmer Group’s investment is a reaffirmation that Social Solutions is the living the adage of doing well while doing good.”

The $59 million will go into two separate pots over five years.

Half will be used for product development and deployment, enhancing data science capabilities and hiring, Nimsger said. The rest will be available in the form of matching grants to make the software affordable to nonprofits and social service agencies.

The plan is to roll out the education data-analytics dashboard in “at least 20 cities,” Nimsger said. She and her team are finalizing the list. Austin, Dallas, Houston, San Antonio and Seattle are a go.

Social Solutions boasts a workforce of 240, with about 210 employees here in Austin. The rest work remotely.

The company intends to add between 25 and 50 new hires by the end of the year, Nimsger said. The Ballmer funding will account for about 50 percent of those and they will be in three main categories: product management, software development and data science. Other needed hires include sales and marketing.

Social Solutions executives declined to share revenue figures but said the company is profitable.

Edmondson said success will be measured based on whether nonprofit organizations are satisfied with the Social Solutions product.

Another kind of triumph, however, would be “the social services sector writ large as a legitimate market,” Edmondson said. “There is no more important field than improving the lives of children and families. With a viable market and competition for high quality products, it’s possible to achieve a social good and business goals as well.”

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