For years, Pierce Ujjainwalla and the folks at Ottawa software firm Knak have watched other players in the city’s tech community, like Shopify and up-and-coming SaaS venture Rewind, grab headlines for their high-growth exploits.
Now, Ujjainwalla believes it’s his startup’s time to shine – thanks in no small part to a major injection of capital from an investor that also funded those other rock-star ventures.
Knak, whose technology makes it faster and cheaper for companies to create mass email marketing campaigns, announced this week it received US$25 million in equity financing from New York-based venture capital firm Insight Partners.
Winning the backing of Insight is no small feat, as Ujjainwalla and his team well know. It’s the same firm that led Shopify’s $100-million series-C round in 2013 and Rewind’s recent $65-million series-B raise, and its portfolio includes hundreds of successful startups across North America.
“We had many term sheets, and for us, Insight was the clear winner,” said Ujjainwalla, whose firm received offers from half a dozen venture capital firms. “If you look at their portfolio, they have some of the best software companies in the world, and they have had an incredible ability to pick companies that really change the world. We want to be one of those companies.”
Indeed, Knak has come a long way from its humble beginnings six years ago, when Ujjainwalla hatched the venture in his basement with business partners Brendan Farnand and Patrick Proulx.
Then a marketing consultant, Ujjainwalla realized clients dreaded the process of crafting custom marketing emails, a costly, time-consuming endeavour that often required weeks of rewriting code to make even minor changes in a digital campaign.
He and his team created a software system that used drag-and-drop templates to simplify the process. Ujjainwalla says Knak’s platform helps corporate marketing departments get campaigns off the ground weeks or even months sooner at a fraction of the price.
“There are so many marketers out there today who are still trying to code their emails and code their web pages or they’re working with developers to try and get their work done or they’re working with these very expensive agencies,” he said. “We want to give marketers that control back.”
The product quickly took off, and Knak soon compiled a roster of hundreds of small clients attracted by its month-to-month billing structure. But its staff found dealing with that many customers unwieldy, and constant client turnover left the company’s long-term growth prospects in doubt.
The turning point came in 2017, when a representative of one of the world’s largest pharmaceutical companies saw Knak’s presentation at a trade show and asked Ujjainwalla and his team to create a custom template tailored to the firm’s specific needs.
The result was a product that would allow the big pharma company’s marketing experts to design their own emails in a matter of minutes without being required to know how to code or use software such as Photoshop.
That job soon caught the attention of other large enterprise customers, including another pharmaceutical giant as well as business communications platform Slack.
Knak’s revenues have been doubling every year since. Until recently, the company managed to pay its bills out of its own pocket without any outside funding.
But the need for more capital became obvious to Ujjainwalla at the end of Knak’s most recent fiscal year in July.
The firm, which then had fewer than 40 employees, was coming off another year of triple-digit revenue growth. But Ujjainwalla figured he would need to hire at least 50 more people in short order to scale to the level he was hoping for.
He quickly realized bootstrapping wasn’t going to cut it any longer.
"We just saw a massive opportunity ahead of us, and we want to go for the home run."
“We just saw a massive opportunity ahead of us, and we want to go for the home run,” he said of signing with Insight Partners. “We just felt like now is the time. We’re mature as a company, and we want to be the leader in our space.”
As part of the deal, Insight vice-president Philine Huizing will be joining the firm’s board of advisers – a high-powered group that already includes former Cognos chief executive Rob Ashe, TEC Canada small business chair Pascal St-Jean, Leah MacMillan, who leads the marketing team at Trend Micro, and Solace chief marketing officer Mychelle Mollot.
Huizing says Knak’s codeless campaign creation technology eliminates a “significant pain point” for marketers at companies of all sizes.
Noting that much of the firm’s growth has been driven by word of mouth, she believes it’s poised for a breakthrough once word of its capabilities spreads.
“We think there's so much potential to go out and find customers who might not have heard of Knak yet and show them all the value they can reap from the platform,” she said in an email.
Knak now has 42 employees, half of whom are based in Ottawa. After moving into new digs at a south-end business park just last year, it’s already seeking more office space, and Ujjainwalla is confident his firm will be among the leaders of a new crop of locally bred software firms that are ready to make their mark on the world.
“Shopify has dominated for a long time, and I think now we’re seeing this next wave of software companies who are still in that very exciting startup phase,” he said. “I feel like really the sky is the limit here.”