The idea for EngageSmart, the Braintree software company that recently went public at a valuation of $4 billion, came to founder and CEO Bob Bennett about 12 years ago as he was trying to pay some bills.
American Express had a fantastic website with features like scheduling payments and access to more than a year of old statements. But paying his electric bill was a clunky, no-frills affair.
“What biller doesn’t want to offer all those features that everybody wants?” the executive recalled thinking in a recent interview. “But what biller can actually build it for themselves?”
Bennett, who had been working in the credit card processing business for a few years, figured there might be an opportunity to build better payment portals for utilities, hospitals, and other groups that billed consumers but lacked the resources to develop their own sites. An experienced entrepreneur — his first company sold a combined refrigerator and microwave called the Microfridge that was a surprise hit in the 1980s — Bennett formed InvoiceCloud, which changed its name to EngageSmart in 2018.
Since its start in 2009, the company has expanded to a variety of related services, such as running sites for nonprofits to collect donations and helping small health care providers such as speech pathologists and nutritionists schedule appointments. About 26 million consumers used EngageSmart’s software last year, almost all without knowing anything about the company, which has grown to almost 700 employees as of the end of June.
EngageSmart’s revenue last year topped $146 million, up 78 percent from 2019. That generated a small net loss of $7 million, down from a loss of $41 million a year earlier. And the company could be profitable this year after using some of the $338 million of proceeds from its IPO last month to pay down debt.
Stock market investors welcomed the debut, pushing the price of EngageSmart’s shares from the initial offering price of $26 as high as $37.83 on Sept. 23, the first day of trading. They’ve since settled down to $32.07, still showing a gain of 23 percent.
Bennett, who owns close to 4 million shares of stock, said his company has barely scratched the surface of helping improve online payments and other service offerings. Newer offerings are targeting insurance, consumer finance, and telecommunications companies.
And there are many more potential clients, he said. “We have less than 1 percent market share of our addressable market.”
Solving simple but seemingly intractable problems is a classic path to succeeding in building new companies, and one that suits Bennett’s skills, according to John Fletcher, managing partner at Boston consulting firm Fletcher Spaght.
“Bob is a classic entrepreneur in that he can perceive market needs and convert that into a company to meet those needs,” said Fletcher, who has known Bennett for about 30 years.
Bennett grew up in Westwood as one of eight kids. Money was tight and he earned extra cash working at a marina in Maine in the summers.
“Every morning was cold, on your knees, bailing boats with a little milk jug with the top cut off,” he said. “But we were able to make good money, and I learned about running a business. ... I knew that I’ve got to be running my own business at some point.”
He ran track at Westwood High, though his most memorable race was coming in dead last in the state championship 300-yard sprint his senior year. He then majored in applied math at the University of Maine, where he graduated in three years, eager to minimize the cost of tuition.
A few years after graduation, he was developing software at Western Electric in North Andover and saved enough money to buy a house in Woburn. Cooking dinner after a day at work was a bachelor’s dilemma and the seeds of Bennett’s first big idea for a company: a combination oven and refrigerator that could be scheduled to cook prepared meals.
Further research revealed a microwave would be a better fit with a fridge and Bennett patented the idea of the combined device in one housing and sharing a power supply. Prepared meals could be kept in the freezer until it was time to pop them in the microwave. The device cleverly turned off power to the fridge temporarily while the microwave was in use to avoid overloading the electrical circuits in hotels and college dorms.
The microfridge would end up as a surprise hit, selling many thousands of units. But it wasn’t an instant success. Focusing on the college student market meant winning over people like Marc Robillard. Now retired, Robillard was the director of student housing at Boston University in the 1980s.
Bennett initially was so pushy and aggressive with Robillard that the BU director stopped taking his calls. But after a year of persistence and winning over other big customers such as the University of Massachusetts, Bennett got Robillard’s attention.
“He just kept on coming after me, explaining it was the best thing since sliced bread,” Robillard said in an interview. Bennett also learned to emphasize how he would partner with BU and rent the microfridges to students.
“The essence of marketing is solving people’s problems profitably, and Bob embodies that,” Robillard said.
But the story also illustrates one of Bennett’s other strengths, his persistence.
“I ended up getting good on the phone, being able to get somebody on the phone, just building rapport with them,” Bennett said. “And it became a gift that has continued to give not just to me, but to all of our salespeople across the country.”