Organic Growth Masterclass: Grayce, backed by Literacy Capital

Richard Pindar, Chief Investment Officer at Literacy Capital, explains how targeting larger clients and giving the business the confidence and ambition to scale up has been the key to success for business consultancy firm Grayce.

Grayce is a business consultancy that places graduates into blue-chip businesses to work on business change and transformation projects.

Richard Pindar, chief investment officer says: “We invested in Grayce in July 2018. It was set up in 2012 by a husband and a wife team. At the point we invested, they had grown the business to approximately £5.5m of revenue, £1.5m of EBITDA and analyst headcount of 100. The Grayce business model is to recruit high calibre graduates from leading universities, place them on a structured training programme and deploy them into their blue-chip client base, predominantly on business change and transformation projects. Graduates stay for at least three years and are fully paid during all their training. They typically work for two or three different clients across that period, providing them with a variety of experiences, with clients benefitting from a flexible graduate talent pool.”


Richard says: “Enhancing the management team was one of the things that the founders wanted to address as part of the transaction, given one of the two founders wanted to leave completely. The already lean management team of two was to become a management team of one. To supplement the team, we added a chairman at completion, we added a new CFO and we also hired a new sales director who joined a few months after completion. We effectively created a senior management team of four people rather than one, to allow the business to scale.”

“About a year after our investment, the remaining founder was looking to step down, and so we also brought in a new CEO. The CEO joined the business in January 2020. All of the new recruits had experience in growing and running much bigger businesses and had grown them at a faster rate than Grayce had previously been able to. Crucially, we felt they would also help to retain the unique culture that the founders had built.”


Richard says: “At the time we invested, a lot of the clients that Grayce had were reasonably small and were businesses that were probably not able to scale into large accounts. The business had a high number of clients but many weren’t big enough, with analysts often being placed in ones and twos. This meant it would be difficult to manage these accounts and the business, if we continued with this approach. One of the focuses we had and the business has been very good at is targeting bigger clients, that have the potential to grow into larger accounts. It is far easier to manage an account with 20 analysts than ten clients with two analysts each.”

“When we invested, two or three of Grayce’s top ten clients were in retail, which then was already in a difficult place and were unlikely to ever be large accounts. Today, the largest clients are now in pharmaceuticals, financial services, insurance, legal services or energy.

Overall, the level of confidence and ambition in Grayce has certainly increased. I think that’s been the biggest change and biggest help in creating value in the business. If they had been worried to spend more on rent or hire an extra salesperson, we’ve said ‘look, we need to make those investments if the business is going to grow’. I think that’s been the biggest change and mindshift change within the business since we invested.”