SUCCESS STORY:Window Nation
Investment Year: January 2018
Industry: Consumer Services
Ownership Profile: Founder-Owned
Exit Year: July 2021
Situation Overview
Window Nation is a value-added provider of replacement windows and doors, exclusively serving the residential repair and remodeling market. The company generates customer leads through a direct-to-homeowner, multi-channel advertising strategy and converts leads into orders through its company employed salesforce.
Harley and Aaron Magden (CEO and President, respectively, at the time of our investment) were third-generation operators, having grown up working in their family’s original window business. They founded Window Nation in 2006 and expanded to five markets and nearly $100 million in revenue by 2017. At that point, they realized the company required an outside investor to help them execute on their long-term expansion vision. In early 2018, Harley and Aaron selected Cortec Group following a competitive sale process and remained significant owners in the business while continuing in their operating roles.
Investment Thesis
Window Nation had a differentiated business model with numerous attractive investment attributes and various avenues for expansion. The Magdens were seeking more than just capital; they wanted a hands-on partner with relevant experience that was capable of providing both strategic and tactical guidance to support their growth plans. This aligned well with Cortec’s industry knowledge, previous experience growing direct-to-consumer companies, and long track record of teaming with founder-led businesses.
Window Nation operated in a large, fragmented, and growing market. The company’s marketing-centric business model, highly trained direct salesforce, and leading customer service levels facilitated sustained, high levels of organic growth and market share gains in existing markets. Cortec believed there was an opportunity to accelerate Window Nation’s expansion by broadening the management team, improving systems and data availability, qualifying new manufacturing partners, and enhancing its marketing capabilities to enter new markets quickly and cost-effectively.
Evolution From Entry to Exit
Key Cortec Value-Add Initiatives
Scaled Organization and Improved Operations
- Added senior executives across finance, operations, sales, and marketing functions, along with other additions to build organizational infrastructure necessary to support growth
- Qualified new manufacturing partners and expanded installation capabilities, increasing inventory availability and operational control
Facilitated Strong Organic Growth
- Entered ten new markets (~3 per year), expanding geographic presence from five to 15 markets by executing a repeatable and scalable playbook to support new greenfield openings
- Doubled revenues from existing markets and nearly tripled the size of the overall business in 3.5 years, entirely organically
Optimized Marketing and Sales Functions
- Top-graded and expanded the marketing team
- Applied a disciplined, data-driven approach to marketing across traditional and digital channels, improving lead generation and conversion, enhancing overall advertising cost-effectiveness
- Increased field salesforce from ~90 to ~175 employees while improving close rates and driving higher average order values through proprietary sales training and innovative, field-based technology solutions
Professionalized Systems
- Upgraded ERP system to improve data capture, job management, and KPI reporting
- Implemented proprietary program to manage all aspects of the customer sale process, from initial appointment to job completion and post-installation follow-up
Footprint Expansion
Outcome
In July 2021, Cortec exited its investment in Window Nation through a sale of the company to a larger investment firm.
Past performance is not necessarily indicative of future returns. Case studies are for illustrative purposes only and do not represent a complete list of investments. There can be no assurance future investments will be comparable in quality or performance.
