Neat move across Phila. for scanner maker
The fast-growing Neat Co. will stay in Philadelphia with a move from West Philadelphia to Center City this week.
Neat move across Phila. for scanner maker
Mike Armstrong, Inquirer Columnist
For the better part of a decade, the Neat Co. has been trying to help people live with less paper through its line of scanners.
Now that it’s moving offices from West Philadelphia, the company is trying to live what it preaches. Its 52 employees have been told they may take just one box of personal items and paper files with them.
“We are not buying more filing cabinets,” said Neat chief marketing officer Kevin Garton.
Well said, for a company that has been championing the digital filing cabinet.
Neat Co. is also not moving very far - literally two subway stops along SEPTA’s Market-Frankford Line. Tuesday, the company will trade its ground-floor offices at 3401 Market St. in West Philadelphia for the 35th floor of 1601 Market St. in Center City.
While Neat Co. considered several possible new locations, staying in the city was a priority for its mostly young, technology-savvy workforce, Garton said. Nearly all had been walking, biking, or taking public transit to work, and they wanted to continue to do so.
However, the 6,000-square-foot offices in the University City Science Center were getting a little crowded, Garton said, even for an operation with an open-office layout.
Starting Wednesday, those Neat Co. employees will rattle around in 14,000 square feet of space in the 36-story office tower that’s also home to two document-driven companies, Radian Group Inc., the huge mortgage insurer, and KPMG L.L.P., the global accounting firm.
Companies generally don’t move into bigger offices unless they expect to get bigger themselves. And Neat Co. has been one of the fastest-growing privately held companies in the city for the last several years. Garton declined to provide sales figures for 2010.
Inc. magazine ranked Neat Co. at No. 1,282 on its 2010 list of the fastest-growing private companies with revenue growth of 231 percent between 2006 and 2009. The company told the magazine it had $28.5 million in sales for 2009 as well as 160 employees.
As for why its workforce is smaller now, Garton described a change in strategy that shows just how far the company has come since it was founded as NeatReceipts Inc. by Rafi Spero and his father, Les Spero, in late 2002. Back then, the Speros peddled a scanner to digitize business cards and receipts via their website and through a kiosk at the Philadelphia International Airport, snagging captive business travelers with time to kill.
By 2010, the renamed Neat Co. had 17 kiosks in 11 airports around the nation. But in the fourth quarter, the company had decided to exit that distribution channel with its NeatReceipts mobile scanner and NeatDesk desktop version widely available at office-supply retailers such as Staples, OfficeMax, and Office Depot, and through Amazon.com and other shopping websites, including its own online store.
The last five airport kiosks are expected to close in May, Garton said.
The Speros left their operating roles in late 2009 after Jim Foster, a former senior executive at Sage Software North America, was hired as chief executive officer of Neat Co. that August. Both Speros remain major shareholders, and Rafi is a member of the board of directors. Neat’s largest shareholder is Lawrenceville, N.J.-based Edison Ventures, which has invested $15.5 million in the company over several fund-raising rounds.
While selling to paper-besieged small businesses remains Neat Co.’s bread and butter, the company has been making a big push into the consumer market. Garton said small business accounts for about 60 percent of its customer base, consumers 20 percent, and those who work in large organizations are responsible for the other 20 percent.
One sign consumers may be finding the products: Parade magazine (which no one would confuse with Wired) named NeatReceipts its “product of the week” in its April 3 edition.
Venture-backed Neat Co. is not without competition. Fujitsu Ltd., of Tokyo, and Visioneer Inc., of Pleasanton, Calif., make the scanners that tech reviewers most often compare against Neat’s products.
Each company seems bent on “outgreening” the other with messages about conserving resources, reducing paper waste, and other sustainability-speak. For good reason, Garton said. “Paper is a universal problem,” he said. “It is remarkable how much paper comes into our lives.”
To me, the only thing that would make Neat Co. greener is if public subsidies were not involved in its corporate relocation. But, no such luck.
The city is providing up to $105,000 in job-creation tax credits, financing through a Philadelphia Industrial Development Corp. Growth Loan, and up to $20,000 in training grants from the Philadelphia Workforce Development Corp. Pennsylvania’s Governor’s Action Team provided a total of $150,000 in tax credits, job training assistance, and an opportunity grant.
Neat Co. intends to turn that taxpayer “paper” into human capital with plans to hire 25 people this year. That should be heartening for a city that used to lose tech companies like this to office parks in Malvern and other suburbs a generation ago.
Mike Armstrong blogs about Philadelphia corporations and business-related topics. Contact him at 215-854-2980.
Reach Mike at marmstrong@phillynews.com.
