EvonSys is raising a Crowd SAFE at a $20 million valuation. The key factor driving this valuation is EvonSys’ impressive revenue of more than $14 million in 2020 (the most recent financials available). EvonSys is a services business, so a low revenue-to-valuation multiple of 1.4x is reasonable. Investors can expect EvonSys’ valuation to increase in direct correlation with revenue. If the company can continue posting strong year-over-year growth, investors’ shares may quickly become more valuable. 

It’s difficult to pinpoint an exact market that EvonSys sits within. The company provides consulting and low-code development services for businesses hoping to upgrade their legacy workflows. That business model most closely aligns with the software consulting market, which is focused on helping businesses digitize. That market was valued at more than $218 billion globally as of 2020, with a fair expected 12% compound annual growth rate over the last several years. 

EvonSys has a large total addressable market, given the sheer number and size of businesses in need of digital transformation. However, analysts note that markets like software consulting are at risk of decline due to pandemic-related recession. While digitization is a priority for many businesses, it may well be the first initiative on the chopping block for companies struggling to navigate the turbulent post-COVID-19 market. This risk is somewhat mitigated by EvonSys’ focus on low code development. The global low code development platform market is growing at an astonishing 38.6% annually and was valued at $12.8 billion in 2020. By operating within the overlap of software consulting and low code services, EvonSys may be better positioned to weather market hiccups.

EvonSys is led by three executives with many years of combined experience in technology. EvonSys CEO Arun MS spent seven years as a vice president of technology at Citi before founding the company. His experience in helping a massive global bank modernize its technology is directly relevant to EvonSys’ consulting engagements with financial services clients. 

EvonSys Executive Vice President Nishadha Fonseka has even more expertise in the technology industry. He began his career as a developer in 2000 and has spent more than two decades in development and systems architecture for a variety of businesses, including Citi and Cigna. 

Punna Paramasivan, EvonSys’ CTO, also has a systems architecture background. He spent more than five years as a principal systems architect at Cognizant before joining EvonSys. 

The EvonSys leadership team is composed of three executives with a great deal of expertise in the technology industry. This experience makes them well-qualified to perform technology consulting for other businesses. However, the EvonSys team could benefit from more business expertise, including executives in sales, marketing, and finance. While the company’s raise page claims that the team has grown to 300 people in size, no further insight is provided into the roles covered by those individuals. If the company has been able to generate this much revenue with a core team of technologists, imagine how much it could grow with fuel from a strong sales and marketing effort.

EvonSys is a services firm that is not well differentiated from the thousands of other consultancies and individual freelancers offering digitization and low-code advisory for businesses worldwide. EvonSys does not appear to have any proprietary technology or approach. It simply partners with businesses to transform their legacy workflows, a service that countless other firms could provide. EvonSys has undoubtedly been successful, with more than $14 million in revenue in 2020. However, that success seems to be attributable to general demand in the market, rather than any particular competitive advantage. It’s unclear if EvonSys will be able to maintain its growth if market demand wanes.

EvonSys was founded in 2015 and seems to have grown steadily over the last seven years. In 2015, EvonSys served only two clients. Its book of business grew to 20 clients in 2021. These client engagements must be very lucrative, because EvonSys generated $14.6 million in revenue in 2020. Even better, the company posted a profit of more than $3.3 million that year. Clearly, EvonSys has mastered the ability to provide high-margin client services. 

EvonSys’ impressive revenue is by far its primary success. Beyond that multi-million dollar revenue figure, the company appears to be a relatively run-of-the-mill consultancy with standard advisory certifications from relevant software providers like Pega. 

EvonSys is a low-risk investment. The company has been around for seven years and generated an impressive $14.6 million in revenue in 2020, with continued growth in recent months. EvonSys also operates at an impressive profit margin for a service business, with more than $3.3 million in net income in 2020. This is a stable, high-performing business with minimal uncertainty. 

EvonSys is an enormously successful consulting company, but it faces many of the same challenges as all services businesses. It is very difficult to scale advisory products. Signing more deals with clients necessitates hiring more staff, usually at a consistent profit margin. Plus, EvonSys faces tremendous competition from a market inundated with consultancies and individual freelancers offering identical digital transformation services. It’s impressive that the company has been able to generate so much revenue thus far, but there’s no guarantee that EvonSys can continue to differentiate itself as competition increases. EvonSys is also highly susceptible to macroeconomic forces, such as a post-pandemic global recession that could cause all corporate spending to slow.

EvonSys is a relatively generic consulting firm offering digital transformation services to legacy businesses. But what EvonSys lacks in style, it makes up for in substance. Revenue of more than $14 million in 2020 is eye-popping, and growth has apparently continued through 2021. Digital transformation is also a growing industry, with a surprising number of legacy businesses still in need of modernization. Many experts predict that low- and no-code tools are the future of key business workflows, and EvonSys has clearly excelled at communicating this value proposition to high-paying clients. Investors getting in at this fair valuation could watch their stake grow in value as EvonSys continues to expand. 

EvonSys is a digital transformation consultancy providing low-code development services to legacy businesses in need of modernization. This is a growing market spurred from demand by a huge number of companies seeking to adapt their workflows to the 21st century. By far the most impressive thing about EvonSys is its financials. With more than $14.6 million in 2020 income and a net income of $3.3 million, EvonSys has clearly built a successful business model. Investors can get in at a $20 million valuation, which represents a reasonable 1.4x revenue multiple. 

On the other hand, while the existing members have a great deal of technology experience, the team is lacking in business expertise. EvonSys is a generic consulting business without any key differentiators or exciting future growth prospects. It is an atypical crowdfunding candidate. Exit opportunities are less obvious than with most product-oriented businesses, and it’s not clear why EvonSys needs to raise outside capital while generating a multi-million dollar profit. Therefore, EvonSys has been rated a Neutral Deal. 

For questions regarding the KingsCrowd analyst report or ratings for this company, please reach out to support@kingscrowd.com. 

Analysis written February 25, 2022.