In a bold step to solidify its position in the UK’s software testing landscape, 2i Testing, a UK-based software testing consultancy, has announced its acquisition of nFocus, considered one of the longest-established software testing consultancy firms in the UK.
The takeover agreement comes after 2i recently secured an investment from London-based private equity firm Rockpool Investments, giving the company’s aggressive growth strategy a boost as the deal means 2i will be able to expand its market presence across Britain.
The company was keen to stress that, as the acquisition will help it to diversify its current offerings, the firm has the ambition to become “the UK’s top provider of quality assurance services.”
Edinburgh, Scotland-based Dave Kelly, the current chief executive of 2i Testing, explained the reasoning behind the acquisition: “nFocus aligns perfectly with our vision, culture, and commitment to delivering exceptional outcomes for our clients. Their team of quality engineers and their leadership bring invaluable expertise and innovative capabilities to 2i, enhancing our ability to expand our influence in the market.”
In the short term, both 2i and nFocus will continue to operate under their respective brands, maintaining their own identities in the market.
However, in the long term the two companies will be combined as they stressed they have shared values and enhanced capabilities. By combining resources, the two companies aim to implement a host of operational efficiencies and review service delivery, they said.
Capital injection
2i, which is based in the Scottish capital of Edinburgh, employs around 200 people across the UK. The firm enjoyed rapid organic growth in recent years.
Last year, the company hit just over £20m in annual turnover, providing testing and quality assurance services to a range of clients, including in the financial services space such as Virgin Money and insurance giant Abrdn.
The acquisition of nFocus should not come as a surprise. After 2i raised fresh funds the firm did hint it was planning to eye some takeovers as Kelly had stated that the investment opened the door for acquisition opportunities.
“The funds allow us to accelerate growth as we aim to increase our revenue to more than £50m in the coming years,” Kelly said.
Kelly, who moved from managing director to CEO in 2022, said last year he was keen to explore acquisition opportunities with the injection of capital and experience that Rockpool will provide.
The 2024 funding was provided by London-based private equity firm Rockpool Investments, which is well-known within the UK investment space for supporting profitable high-growth businesses with ambitious growth plans.
Rockpool usually provides funding of between £5m to £15m to profitable UK-based private companies and has invested over £675m since inception. The firm’s investment was led by Guy Nieuwenhuys and Will Beckett.
Nieuwenhuys explained why his firm decided to allocate funds and stimulate potential takeovers in the UK as he had been “impressed by their proactive investment in talented people and automation products.”
He added: “This business is highly innovative and takes a strategic partner approach to working with its clients. Increased digital change poses a huge risk to organisations as system failures can lead to significant financial and reputational issues for companies and their senior executives.”
25 years in the market
For nFocus, the acquisition is the final stop after having been active in the market for 25 years.
The Shropshire-based testing firm has been around for since the start of the millennium, with a heavy focus on software testing and quality assurance, serving a range of British financial services firms.
Danny Crone, the founder of nFocus, reflected on the company’s journey since 2000: “When Ross Lister and I started nFocus, our mission was to create a business where talented individuals could thrive while consistently delighting our customers.”
He added that “we see 2i, a like-minded organisation, recognise our success and desire to partner with us is truly exciting.”
Meanwhile, Ryan James, the managing director at nFocus, also weighed in calling the takeover “a pivotal moment” for both companies.
“It brings together two of the UK’s most successful testing organisations in a natural and organic way,” the UK-based QA veteran said.
“Over the past three years, we’ve seen significant growth, including doubling our permanent headcount and adding over 40 new clients.”
James was keen to stress that the firm’s Test Engineer Academy has worked to address industry talent shortages and James is convinced that “ joining forces with 2i enhances this momentum, positioning us as the leading provider of quality assurance and testing services.”
‘Career in testing and QA’
nFocus Testing made headlines across the industry in recent years for its efforts to attract and train new QA talent.
In its home market, the UK, a range of recent research reports have found that there is a significant IT skills gap.
More than nine in 10 software companies said recently there is a gap in IT skills in Britain, primarily due fast developments in artificial intelligence, cloud computing and data analytics.
Despite these findings, James is hopeful as he sees that many graduates are opting for a career in testing.
“Many graduates are seeing the appeal of a career in automated software testing and quality assurance. It’s a career that offers endless potential,” he said.
James added: “Our growth is directly due to the rapid changes in technology. New software systems featuring machine learning and automation are highlighting exactly why our testing and quality assurance services are needed.”
“The changes in technology have led to a national skills shortage,” he acknowledged.
As a result “digital transformation teams are struggling to keep up with the skills needed to continually test and quality assure that the latest tech. That’s why they are turning to us to help them find the right people with the right skills.”
James is referring to the firm’s academy, which was launched especially for computer science graduates and will now become part of the 2i Testing group.
During the two years since the launch of the program, nFocus supported 31 students. The initial plan was to take on 16 graduates per year, but demand for the training was more than James expected.
“So many graduates are seeing the appeal of a career in automated software testing and quality assurance. It’s a career that offers endless potential,” he said.
“We never expected the demand to be so huge. We had only ever planned to train one intake of graduates per year, and this has already increased to three,” James continued.
He stressed that the academy is showcasing how the training isn’t just about upskilling people.
“It is directly placing them into jobs that need their new skills. This is hugely exciting for clients as well as us because they can then hire the right people at the right time for their digital projects, knowing that they have the latest training and knowledge behind them,” James concluded.
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