Saskatoon software company to hire 365 people after record-breaking $40M cash injection

A Saskatoon software company has clinched one of thelargest venture capital investments in prairie tech sector history.

Vendasta CEO Brendan King says a $40-million cash injection from private investor groupswill allow the company to more than double in size in three years, to 650 employees from 285.

"We'll have to recruit, definitely, outside of our borders. We'll have to look outside of Canada. But we'll look to bring people back who have left Saskatchewan." King said.

It's the most growth funding ever invested in a Saskatchewan tech company, in an industry that's just begun to boom in the Prairies.

• Now is a great time to be studying computer science in Saskatchewan, says tech advocate

'A hard slug'

Vendasta's online software gives companies that don't have their own sophisticated digital platforms access to servicessuch as marketing, human resourcesand accounting.

Vendasta has sold its products tomore than 16,000 mid-size companies with a combined total of around 12 million customers.

The company has plans to dramatically increase its customerbase, which is largely in the United States.

King and six buddies started the technology company in his Saskatoon garage in 2007. They had previously createdPoint2 Agent, a software that helps real estate agents advertise properties online.

Like most fledgling startups, it relied on tax breaks, interest free loans from the Government of Canadaand smaller venture capital investments to reach a point that it could land significant venture capital growth funding.

In its new deal, Vendastaclinched $25 million from the Canadian Business Growth Fundand $15 million from Comporium Inc. and Saskworks Venture Fund Inc. in partnership with Vanedge Capital LP and BDC Capital Inc.

Most venture capital deals in Canada put money intocompanies in Toronto, Montreal and Vancouver. There werenearly 400 such deals in 2018 totalling $2.8 billion. Two-thirds of those were in the information and communication technology sector.

King saysinvestors who are used to dealing with tech companies inmajor North American cities are often skeptical of aSaskatoon-based tech company.

"It's been a hard slug," King said. "We do have pressure to open offices in other places, to get access to talent and customers. But we're happy to stay right here."

Hiring Spree

At the moment, most of Vendasta's staff are located in Saskatoon, and three-quarters of themwere born or educated in Saskatchewan. It has 30 workerslocated in other cities, includingSeattle, Chicago, Calgary and Toronto.

King says computer science programs in Saskatchewan are turning out skilled engineers and designers, but that he's had to look outside the province and country for senior staff.

7shift CEO Jordan Boesch, whose company is also in Saskatoon, is familiar with that challenge.

About 10,000 restaurants use his company's software to scheduletheir employees. Boesch's goal is to grow his customer base to a million restaurants and expand to include hiring, trainingand paying restaurant employees.

"It takes some courage for companies to stay here [in Saskatchewan]," Boesch said. "To understand you're going to have to do some training. People are super ambitious, and they're smart, and the only detriment is, 'Oh, you've never done that before."

Boeschhas 90 employees at the Saskatoon office. He openeda satellite office in Toronto to recruit senior staff and experienced salespeople. It has about 30 employees.

"Senior talent, I think, is a big thing," Boesch said. "There's not as many tech companies [in Saskatoon] as there are in Toronto, or Vancouver, or Silicon Valley or New York, where's there's a perpetual cycle where people have been through that before."

His company attended a career fair in So Paulo, Brazilto wooexperienced software engineers and designers, and helped five people relocate to Saskatoon.

"I see a bright future here," said Alex Andrade, a Brazilian software developer whomoved to Saskatoonwith his family in Februrary.

"Saskatoon is amazing city. My commute every day is 5 minutes walking, My two daughters go to school by themselves. This is a dream."

A booming industry

Vendasta's chief strategy officer Jacqueline Cook says being headquartered in a small prairie city may have been a disadvantage in the company's early years, but she believes it will now work in the company's favour,attracting employees who want to escape cities that have higher costs of living.

"You can have a fantastic job and career that is growing, but you can also afford to have a home, and to travel and to not spend 3 hours in a car everyday to work," Cook said.

Cookmoved to Toronto from Saskatoon after graduation to build a start up tech company. Shesold five years ago and returned home to work for Vendasta.

With the oil and gas industry in adownturn, and a drought dashing hopes for a bumper crop, the boom in the tech industry has become a rare good news story for Saskatchewan's economy.

"It's pretty far out to think that a technology company is Saskatchewan's exporter of the year," Cook said, referencing a recent award from the Saskatchewan Trade & Export Partnership.

"This [venture] funding will allow us to globalize our platform and take it to even more countries around the world."