Ottawa’s Assent Compliance has made a habit of doing things a little differently than most software companies.
From its location on Coventry Road in the east end – far from the tech mecca of Kanata – to its focus on the little-known field of regulatory compliance, the firm is known for taking the road less travelled.
Friday, the tech trailblazer announced it has landed a $40-million series-B round led by Maryland’s Greenspring Associates. Others involved in the new round include current investors Volition Capital, OpenText Enterprise Application Fund, the Business Development Bank of Canada, the National Research Council of Canada’s Industrial Research Assistance Program, RBC and private investors.
The latest cash injection comes just over a year after the 225-employee firm received $20 million in series-A equity investment. Assent Compliance CEO Andrew Waitman says that’s among the largest combined series A and B rounds within such a short time span in Canadian history.
Founded in 2005, Assent Compliance specializes in software that ensures multinational firms and their suppliers are following an ever-growing list of government regulations on everything from human rights to health and safety standards. Mr. Waitman said Assent hadn’t planned on pursuing a series-B round until later this year, but so many investors were clamouring to get on board the firm decided to act now.
“We were like, ‘Well, we should be getting while the getting’s good,’” he said with a laugh. “It allows us to focus on execution now.”
When the former managing director of Celtic House and chief executive of Pythian joined Assent in 2014, the company had fewer than 25 employees. Thanks to the latest funding, the firm expects to boost its headcount to 325 within the next 12 to 18 months.
While Mr. Waitman said he couldn’t name any of Assent’s customers for security reasons, he said they include “the biggest of the big companies. I think that kind of raised eyebrows from the investors’ perspective.”
Fortune 1000 clients
That ability to attract multinational clients is rare for a software-as-a-service company such as Assent, said Greenspring managing partner John Averitt. He said most growing enterprise software firms focus on landing small and medium-sized clients before graduating to the big guys.
Not Assent Compliance, which began signing up Fortune 1000 firms practically right out of the gate.
“A lot of SaaS companies, to get to that enterprise level takes a lot of time and a lot more capital,” said Mr. Averitt. “It’s definitely a very strong signal that even in the early days of this business, they were able to achieve large customers and build really trusted relationships with them.”
Mr. Waitman wouldn’t reveal the firm’s monthly recurring revenues, saying only they are between $1 million and $4 million. Assent’s recurring revenues have been growing at more than 100 per cent annually for four consecutive years, a streak that has turned heads in the investment community.
“We’ve been impressed with the products that they’ve delivered to date and the road map of products that they have on the horizon,” Mr. Averitt said. “I think our capital will further drive some of that product R&D.”
In addition to further developing its suite of products, the firm plans to use the latest funding to beef up its sales and marketing teams and expand its reach in Europe, a move that will require significant investment, Mr. Waitman said.
“You can’t go into Europe half-assed,” he said, noting customers on the other side of the Atlantic might ask for additional services and features that will need to be incorporated into new versions of Assent’s software. “That’s a big push for us next year.”
It’s all part of Assent’s bid to become “a truly global company,” Mr. Waitman said. To offer an idea of the kind of scale he’s talking about, he invokes the name of another well-known Ottawa software success story.
“We’ve got a long way to go to be a Shopify, but our series A and our series B are bigger than their series A and their series B,” he said with a chuckle. “Now their series C (a $100-million round in 2013, 16 months before the firm went public) was really big. We’ll see. Whether we can execute as well as Shopify has, whether we can grow to the scale that they have, we’ll only know in five to 10 years.”