A pioneer Philly software maker is sold to a Latin American giant after a 27-year run

WebLinc Corp., one of the oldest Internet companies in Philadelphia, is being bought by VTEX, one of the hottest software companies in Latin America.

With its new staff of WebLinc engineers based at its Old City offices over the National Mechanics bar, “Philly is the new center of gravity for us,” says Amit Shah, VTEX chief strategy officer and general manager for the United States.

VTEX has been on a growth binge after it raised $360 million last year by selling about one-fifth of the company to Japan’s SoftBank and other tech investors.

“It’s great now to be part of a company that’s worth nearly $2 billion, that’s likely to go public” and boost its value further, said Darren Hill, who founded WebLinc in 1994.

Sao Paulo, Brazil-based VTEX, founded in 1999, counts Sony, Walmart, Coca-Cola and Nestle as clients for its software, which manages online sales for its corporate users.

VTEX is bringing on Hill and his software engineering staff of 20, and its principal business, Workarea, the last of three units he has sold in the last two years.

Workarea is a software platform that its clients, from Heineken beer to Philadelphia-based Urban Outfitters, the clothing and lifestyle chain, use to run sales orders and analyze sales data, similar to what VTEX does. Workarea’s platform quickly updates sales websites, tracks which items are selling and which customers are most likely to buy new products, and recommends supply and distribution routes. It also connects remote shoppers with store service people to speed orders.

Hill says he met VTEX founders Geraldo Thomaz and Mariano Gomide in the mid-2010s, when he tried to expand Workarea into Latin America, and found that they dominated that market, where they had far less competition than he faced back in the U.S.

David Hayne, chief technology officer at Urban and son of founder Richard Hayne, was among the first to call Hill when he heard WebLinc was selling. “He wanted to know, ‘Are you guys staying in Philadelphia?’ They have such city pride” and like to deal with local suppliers, said Hill.

In 2017, WebLinc had grown to $150 million in revenues. And as recently as 2018, the company employed more than 150.

But in 2019, Hill sold its 85-worker IT staffing division to San Diego-based BVA, which moved the group to new offices on South Broad Street. And last year, Hill sold Orderbot Software, its 32-worker order-management company, with offices scattered in the U.S. and Canada. WebLinc alumni include Anthony Bucci, founder of RevZilla, the South Philly-based online motorcycle-gear seller.

Hill, 45, and his wife, Kate Swan, own the National Mechanics bar, on South Third Street, as well as the nearby Lucha Cartel cantina. Their employees in all the businesses “are really loyal,” Shah said. “I look forward to hanging out there when it’s easier to just walk downstairs to the bar and eat your lunch and go back upstairs to work. And maybe go back down and have a drink at the end of the day.”

Shah said it was getting tougher for small outfits such as WebLinc to compete against “FUD — Fear, Uncertainty and Doubt — the questions the big boys are out raising about financing when you’re small.” With the merger, “that’s now off the table; they just look at our funding statement.”

“We compete with Darth Vader,” Shah added. “Oracle, SAP, Salesforce, their job is selling as much software and creating as much complexity as possible for the customer. Our approach is, ‘you buy our platform, and we get paid [a percentage] when your customers buy from you,’ with less incentive to complicate transactions.”

VTEX is buying out WebLinc’s owners, led by Radnor-based Safeguard Scientifics, at an undisclosed price. Safeguard invested $16 million into WebLinc, starting in 2014, and owned 40%. Safeguard chief financial officer Mark Herndon said his company is reviewing the deal, which “of course we knew about in advance,” and will disclose the price in its annual financial statement next month.

For now, Hill will work on introducing Workarea’s largest users to VTEX. “I’ve never worked for anyone else before,” Hill said. “It will be great, or terrible.”

He said Philadelphia remains a good place to run a software company — there’s relatively little competition for engineers, compared with New York or California — but “they need to pay the teachers more. And improve the schools. It’s commonplace, we pay young professionals six figures, but as soon as they reach the age where people have kids, they start splitting for the suburbs.”

Graycliff Partners, a New York private-investments firm, has agreed to buy Ballymore, a 150-worker Coatesville company that makes rolling ladders and work platforms, for an undisclosed price, from Philadelphia-based Osage Partners. Fairmount Partners of Philadelphia advised Ballymore on the deal.

Ballymore was founded by welder and World War II veteran John Colgan in 1945, and makes ladder systems for banks, railroads, airlines and factories. Osage bought the company in 1998.The firm now focuses mostly on software and health-care firms.

Graycliff’s other area investments include E&E, an IT contractor for Pennsylvania state government, and and wire-mesh maker Gerald Daniel Worldwide of Hanover, Pa.