Powering connectivity: Inside Exponential-e's journey to transform enterprise IT solutions
Powering connectivity: Inside Exponential-e's journey to transform enterprise IT solutions
Henry Pepperall, CFO at Exponential-e, offers an insider’s view into how the company has evolved from a connectivity provider to a leading managed services and cloud solutions company.
Founded in 2000, Exponential-e has grown by integrating cutting-edge technology with innovative financial models to meet the rising demands of enterprise IT infrastructure. With a strong focus on critical sectors like defence and healthcare, the company has expanded its service offerings and geographic reach.
We talk to Henry about Exponential-e’s strategic acquisitions, its focus on talent development, and their plans for continued growth into new markets and verticals.
What are the key barriers to growth as a scale-up?
Get the latest scale-up news straight to your inbox
Sign up to our quarterly newsletter
Share a bit about Exponential-e and the challenge you set out to solve
Exponential-e was originally focused purely on selling ethernet connectivity to businesses. At the time, the industry wasn’t really offering a professional service layer on top of the connectivity solutions, and that was the gap we aimed to fill. We saw a need to not only provide the basic infrastructure but also wrap it with a managed service offering that added real value for the customer.
The challenge was to offer business-class connectivity at a price point that was more accessible, against other providers charging hefty upfront costs for installations. We re-engineered the financial model, spreading the cost of the connection fee, which allowed more businesses to benefit from high-quality service without being squeezed financially.
We also focused on being more agile than our competitors, developing flexible products. Back then, connectivity was quite rigid – you either got 10mb or 10mb – i.e. there was no choice! We introduced scalable options, giving businesses more control over their bandwidth based on what they actually needed.
Over the years, we've expanded far beyond connectivity, now offering cloud solutions, unified communications and security services, all with a managed services wrap. Today, we serve over 3,000 customers across various sectors, including public, private, and defence. We've become a trusted partner for critical national infrastructure projects, which shows how far we’ve come since those early days.
What strategies did you use to scale up, and how did the company evolve throughout your growth journey?
Our growth strategy has always been about layering additional value on top of our original connectivity offering. As we realised early on, cloud services are only as good as the network that supports them, so we built out a strong cloud offering that seamlessly integrated with our connectivity solutions. That was really a game-changer for us. We moved from being just a connectivity provider to a full-service IT partner for our customers. From there, we expanded into unified communications, managed security, and now we're heavily focused on managed services. Each new service we introduced was complementary to the ones before, and that helped us build strong, long-term relationships with our clients.
We’ve also been quite strategic about acquisitions. When I joined in 2017, we were already at around £100 million in revenue, but since then, we've more than doubled that, hitting £250 million this year. Part of that growth came from acquiring companies that allowed us to enter new markets and build new capabilities. For instance, our acquisition of a company called Vysiion in 2020 was pivotal because it allowed us to gain a strong foothold in critical national infrastructure and defence. They brought in expertise in installing networks in really tough environments, like offshore wind farms and rail infrastructure, which was a natural extension of our existing services.
What has been your biggest challenge when it’s come to scaling up?
I’d say one of the biggest challenges for us has been access to talent. Particularly when expanding into sectors like defence, critical national infrastructure, and public sector. The nature of the projects we work on in these sectors requires us to have staff with the right level of clearance to handle sensitive information, and that’s been a significant hurdle. We’ve been investing in putting our own internal staff through clearance processes, but it’s a time-consuming effort and a barrier we’ve had to work through.
Another challenge has been building relationships within new market verticals. For example, when we entered the health and defence sectors, we didn’t have those pre-existing customer relationships or the deep connections that some of our competitors might have had. We’ve managed to overcome this by hiring strategically, bringing in people who already had strong relationships in these areas. For instance, in health, we hired a public sector sales director who brought critical insight into how public sector health organisations procure technology services. This has allowed us to win contracts, including building a new transformative network for HSCN, serving many of the hospitals and GP practices located across London.
As a leader of a scaling business, where do you turn for advice?
I believe it’s essential to surround myself with people who have deep expertise in the areas we’re moving into. We’ve brought in advisors and consultants to help shape our strategy, especially in sectors like defence, where credibility and understanding of the market are key. For example, we’ve brought on people like Jeremy Fleming, the former head of MI5, and Lee Rimmer, who used to lead procurement at the Ministry of Defence. They work in an advisory capacity, helping us build a strategy to enhance our cyber credentials, and allowing us to better serve the defence market segment.
Then on the compliance and logistics side we have our advisors at BDO. We brought BDO on board to handle our tax affairs, and they’ve been instrumental in areas like corporation tax, R&D tax relief, and payroll. They’ve also helped us navigate the complexities of indirect taxes and financial reporting on conversion to IFRS. Their expertise has really allowed us to streamline these processes, making sure we’re compliant while also optimising the financial structure of the business to support sustainable growth. It's been a relationship built on trust, and they continue to play a significant role as we evolve.
What are your ambitions for Exponential-e over the next five years?
Over the next five years, my ambition is to continue driving the business forward, with the goal of potentially doubling our revenue to half a billion. It’s an ambitious target, but if we get everything right, it’s within reach. We’ll need to continue leveraging M&A opportunities to strengthen our skills, expand into new geographical and customer markets, and push into sectors where we’ve already seen success – verticals such as health, defence, central government and CNI, as well as commercial markets such as finance, legal, hospitality, retail, construction, business services, etc.
A big part of our future strategy will involve further building out our enterprise sales approach. We’ve already seen significant growth here, but I want us to mature even more in how we focus on specific customer verticals like financial services, retail, and critical national infrastructure (CNI). We need to be more solution-focused, solving customer problems rather than pushing products. This shift in mindset – leading with outcomes instead of tech – is key to delivering what customers really need and taking the business to the next level.
What advice would you give to other business leaders looking to scale their business?
The first thing I’d say to business leaders looking to scale is to stay close to your customers. Understand their needs, be agile, and be ready to adapt to those needs. Markets can shift quickly, and the businesses that thrive are the ones that stay focused on delivering real value to their customers. For us, this has meant evolving from a product-led approach to one that’s more outcome-based, solving specific problems rather than simply selling what’s on the shelf.
It’s also important to stay consistent in your investments and strategy. Once you’ve identified the market you want to serve, stay aligned with that focus. Too many businesses pivot too often, which can dilute your efforts. Finally, I’d recommend thinking vertically – build expertise in the sectors you serve and don’t try to be everything to everyone. The closer you are to understanding your customers' industries, the better positioned you’ll be to deliver the kinds of services they actually need.
Need support on your Scale-up journey?
We’ve got experience supporting businesses at every stage of the life-cycle, from scale-up to sustainable growth and through exit or acquisition.
Get in touch with one of our expert advisers to find out more about how we can support your business journey.