Symphony's CEO is stepping down as the $1.4 billion Wall Street messaging startup gears up for an acquisition push

  • Symphony’s David Gurle is stepping down from his role as CEO of the startup at the end of May.
  • Brad Levy, Symphony’s current president and chief commercial officer, will take over the helm.
  • Gurle and Levy spoke with Insider about the $1.4 billion startup’s future plans. 
  • See more stories on Insider’s business page.

Symphony Communications Services, the messaging startup valued at $1.4 billion, is swapping CEOs and eyeing acquisitions as it looks to expand on a new strategy of helping customers handle more complex tasks. 

David Gurle, Symphony’s CEO since its founding in 2014, is stepping down from his role May 31, the startup announced on Wednesday. He’ll be succeeded by Brad Levy, Symphony’s current president and chief commercial officer, and a former executive at IHS Markit and Goldman Sachs. 

The management transition was announced internally at an all-hands meeting on Wednesday. 

The change in CEOs comes as Symphony looks to parlay its messaging and collaboration roots into a bigger role assisting financial firms facilitate complex trades, even as it struggles to find its place in a competitive market dominated by industry giants such as Bloomberg, Microsoft Teams, and Slack.

“It was important for us to start, I would say, adding talents and progressively shaping the company for the future of what I felt Symphony was going to be,” Gurle told Insider in an exclusive interview. “Slack and Microsoft Teams were coming hard, very strong. We had to find a space for the company. And we went into things that they couldn’t do.”

Those things largely involve doing more complex tasks, like syncing complex trades across many departments inside a firm, or automating more functions with bots or application programming interfaces (APIs). 

The startup is also aiming to help financial firms more seamlessly integrate front-office roles like sales and trading with back-office functions like compliance and record-keeping, betting on demand from firms that have historically kept the two roles separate but now understand the value in connecting them.

A transition of power started in 2018

The transition of power has been in the works for some time. Gurle and Symphony’s board established a succession plan in 2018, and signed a contract with Levy more than a year later, in April 2020, Gurle said. (Levy joined the firm in July.) The intention then, Levy told Insider, was a “soft” commitment that he’d take over for Gurle at some point in 2021 if he delivered on his objectives. 

It was roughly four to five weeks ago that Gurle and Symphony’s board decided to make the switch, he said. 

Levy isn’t the only big hire that Symphony’s made in recent years. In 2019, the startup hired Dietmar Fauser as executive vice president of global engineering, and he soon took on the task of reengineering the company’s tech stack, a task that Gurle says is largely complete.

Fauser’s hiring was followed in February 2020 with the addition of Ben Chrnelich as Symphony’s chief financial officer.

One critical task of the management team will be growing its customer base. The firm has about 550,000 users, a number that has grown from roughly 440,000 at the end of 2019. Insider reported in August 2018 Symphony had 325 clients with close to 350,000 users.

Revenue rose 37% to $57 million in 2019, Gurle told Insider in early 2020. The company told Business Insider it had $35 million in recurring annual revenues at the end of 2017, with a growth rate of 50% each year. Symphony declined to provide updated figures. 

Targeted acquisitions

Levy spent nearly two decades at Goldman Sachs, eventually rising to the role of global head of a former group known as Principal Strategic Investments, a well-regarded team in its securities division known for making bets on fintech and other market structure plays. 

Levy then spent more than eight years at IHS Markit, a financial information and tech giant known for its growth through acquisitions. While at IHS Markit, Levy held leadership roles around distribution, information, and its loan settlement and software services. 

He’ll rely on that dealmaking experience when he takes the helm at Symphony, he told Insider. “We really believe there’s a consolidation phase happening now. And we believe we should be part of that and be a net acquirer of assets,” Levy said. “That makes sense for us.”

The focus, Levy added, will be on companies that fit strategically with Symphony’s product set or customer base, such as communication, compliance, or data science, rather than just buying companies with interesting revenues. Levy and Gurle declined to name any companies that they might be looking at. 

“It will also enable our strategy of getting more active with the buy side, as well as more engaged with the front office,” he said. “The third element is connecting to that back office.”

Bank on the buy side

Success for Levy will mean getting more buy-side firms like hedge funds and asset managers onto the platform, a task that has always been a hangup for the startup. With backing from Goldman Sachs, JPMorgan, Citi, Bank of America, Morgan Stanley, and Wells Fargo, sell-side adoption was never the issue.

The buy-side has been a tougher sell, with two notable exceptions: Citadel and BlackRock. Both are Symphony investors and board members. 

Levy said the buy-side, as the asset owners in the market, represents a key component of the equation. He added, though, that electronification and digitization of workflows tends to be pioneered by those on the sell side. 

As Symphony expands, either organically or through acquisitions, Levy will focus on going deeper in specific asset classes — such as credit or foreign exchange — as well as broader across multiple enterprises. 

“We have to get into the details of these markets and not sort of skim across the surface,” Levy said. 

No near-term plans to go public

Acquisition and growth plans cost money, and while the startup has raised more than $460 million in total, it’s been nearly two years since its last funding round — a $160 million round in June 2019. 

One way to raise money that’s gotten increasingly popular over the past 12 months is going public via a special-purpose acquisition company. Fintech firms, in particular, have proven to be attractive targets for SPACs with SoFi, MoneyLion, Bakkt, and Hippo among those set to hit the public markets via a merger with a SPAC

However, Gurle said that path isn’t one Symphony would likely pursue, citing the company’s governance model. With the multitude of ways to raise money privately, Levy said he has no issue holding off on going public. 

“Most companies on the planet tend to take about 10-years plus to kind of come through any sort of a real exit,” he said. “We’re at year 6.5/7, so we’re, in my opinion, right on time for where we are spending to grow, and then any type of liquidity is further down the line.”

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