Y Soft sells office solutions to companies that have gone digital but still need some paper. And they are good at it: the firm has often been referred to as one of the most successful start-ups grown in the Brno innovation ecosystem. The company is the global number two in its business sector, has a turnover over USD 47 million (CZK 1 billion) and over 20,000 business clients in about 120 countries worldwide. Only a tiny share of its revenues comes from the Czech market.
We spoke with Y Soft CEO, Václav Muchna, about the ups and downs of doing business from Brno and the key factors to their success. His is the third in a series of interviews with the personalities behind notable Brno companies that operate internationally.
Václav founded Y Soft in 2000 as a university project. Originally, the product was an application enabling authentication of printer users with a card reader. At the age of twenty, he decided to leave his studies and concentrate fully on business. Now, Y Soft has physical presence in 17 countries, including the U.S., Japan, Australia, Israel, Dubai or China. The total number of employees is 370, with over 200 of them based in Brno. The employees still keep the major stake in the company.
Y Soft’s mission is to help organisations transform data between the digital and paper form. There’s a need for both directions – we print digital data on paper and we scan paper documents to get their digital representation. Y Soft’s technical solution will pay off if you have at least 4 printers (or multifunctional devices) and over 50 employees.
Their flagship product is SafeQ, covering complete print management and document digitalisation workflows. You reduce costs, knowing the volume of prints consumed by each user and department. The print ‘roaming’ enables people to pick up their printed pages on any device when they authenticate themselves. This way, their sensitive information does not need to be left in the output tray for neighbours’ eyes. SafeQ can then store digitalised outputs directly into e-mails, disk folders and Dropbox or Sharepoint applications.
The revenue comes mostly through the global printer producers like Xerox, HP, Konica Minolta etc. and there are several business models based on software licencing, services, hardware and subscriptions.
SafeQ is being used by 20,000 organisations including over 40% of Global Fortune 500 companies. More than a half of Y Soft’s turnover is being generated in Western Europe. After that, Asia & Pacific, Central & Eastern Europe and both Americas have similar shares.
Their journey to the top
The company’s global expansion started in 2008 and now, the software is localised into 40 languages and the company operates 10 foreign branch offices.
In 2012, Y Soft received the US patent for cloud based print services. Thanks to its processes standardisation, it has conquered western Europe.
Two years later, the company created its start-up fund Y Soft Ventures focused on Central and Eastern Europe and B2B solutions integrating both hardware and software. Right now, there are 7 companies in its portfolio. Some of them (Sewio, Grey Cortex or Comprimato) have already become successful abroad.
The 2014 boom of 3D print meant a new business segment for Y Soft appeared. The company acquired majority stakes in the be3D company and decided to produce its own 3D printers in order to guarantee the full integration with their software.
In 2015, Y Soft started with subscriptions (software as a service). It currently represents only 8 % of the revenues, but Václav expects them to become the main source of income within the next five years. With their market share, Y soft is Nr. 2, behind the world leader Kofax. However, Y Soft is actually considered the biggest technology innovator, what with their annual growth of 28 %. Václav stresses ‘customer first approach’ as the critical success factor.
In 2016, the company launched Y Soft Labs – an innovation centre focused on close cooperation with universities, especially in the areas of robotics and artificial intelligence.
Did Brno play an important role in developing the company?
“No doubt,” Václav says. The idea was born at Masaryk University, and their cooperation with Brno universities remains important still. Y Soft experts consult bachelor and diploma thesis, tens of students intern and work part time at their offices. For the first few years, Y Soft had its office in the Technology Incubator and enjoyed support from the South Moravian Innovation Centre.
“Brno is an excellent place for life,” Václav remarks. “It’s neither just a tourist city acting as a museum, nor a cold polis of business people isolated in glass & steel towers. As a technology centre with all its innovation infrastructure (universities, accelerators, venture capital) it has a great potential for newcomers. The income and living cost ratio is quite similar to Prague. The dark side of the N°2 city is travel connectivity and the housing market.
“Managing a global firm from Brno requires, among other things, to have a global talent in the house. Attracting foreign managers (often surprised by the local quality of life) and contributing to the ecosystem of diversity are likely to be the key factors for building international teams and helping the local managers to grow.”
Václav Muchna was born in Prague. He came to Brno for his studies at Masaryk University, and he’s been living here since. He has one daughter. He enjoys many hobbies, with skying and diving being at the top. He also enjoys working with NGOs with the mission to transfer business thinking and experience to the nonprofit sector.
Y Soft in numbers
|Turnover (in mil CZK)||694,229||935,593||1055,936|
|EBITDA (in mil CZK)||-76,843||36,222||72,881|
|Employees in Brno||219||180||222|
|Share of R&D costs||32 %||32 %||32 %|