Toronto-based startup AutoLeap has closed an $8 million CAD seed round, comprising $6.4 million in equity and $1.6 million in venture debt.
The round was led by Threshold Ventures, with participation from Maple VC, Global Founders Capital, Codename Ventures, and former NFL and San Francisco 49ers legend Joe Montana, through his venture capital firm Liquid2 Ventures.
“Replacing software is a root canal and a half for a small business owner.”
It also included angel investors from the automotive industry, such as former General Motors CEO Rick Wagoner, Shift Technologies co-CEO George Arison, and former Bridgestone executive Ned Aguilar. The venture debt was provided by Silicon Valley Bank.
Founded in 2019, AutoLeap’s software helps local automotive repair shops organize operations, schedule jobs, conduct digital inspections, manage technicians and invoice customers. Co-founders Steve Lau and Rameez Ansari met while studying at the University of Toronto Scarborough, where they formed a search fund called Highland Creek, named after the 38 Highland Creek bus that connects Scarborough Centre to the university.
The pair recently worked together as co-CEOs of FieldEdge, a company that provides SaaS field service management software to home service contractors. FieldEdge was acquired by Advent International in 2018, along with payment solutions provider Clearent, with FieldEdge subsequently merged into Clearent.
Ansari, who serves as co-CEO with Lau at AutoLeap, said one of the lessons the duo learned from their FieldEdge experience was that sometimes with lean startup methodology you can move too fast and exhaust your customer base.
“We certainly had a little bit of that at FieldEdge. We were in a hot market, we had a great distribution team and a sales motion, but we were always playing catchup from a product perspective,” Ansari told BetaKit. “This time, we’re approaching it a little bit differently, still lean startup methodology, still early with the product, still rapidly iterative, but we make sure that when a release comes out, it’s much more baked.”
Prior to FieldEdge, Lau was a partner at Whitecap Venture Partners, while Ansari was a management consultant at Boston Consulting Group, and served as an operator at his family’s business, Synergy Corporation, in Pakistan. For Ansari, the latter experience with Karachi-based Synergy, which was started by his father in 1992 to build diesel power generators, highlighted not only how the small business market is underserved from a technology perspective, but also how challenging it can be for a small business to implement new technology into its operations.
“Replacing software is a root canal and a half for a small business owner,” said Ansari. “A small business owner that’s implementing software at their shop, they have to pay bills, they have seven people whose payroll they have to meet, if they don’t service the cars, make money on those transactions, delight their customers, and make the right margin, then the software is beside the point. We have to be enablers to make this as painless, and as value-oriented, as possible.”
In 2020, AutoLeap has been building a team of 25 employees across two countries, Canada and Pakistan, and throughout a global pandemic, many of its employees have yet to meet in person. While Lau and Ansari anticipated that the startup’s productivity might decrease due to COVID-19, they have found the exact opposite has occurred and assisted in AutoLeap’s product review process.
AutoLeap is still in the process of developing its product and has yet to go-to-market. The startup conducts quality assurance reviews every day during a two-week product release process, as it wants its product to be as simple to use as Amazon and Instagram, but in the automotive space.
“There’s a ton of software out there for the space, but the software is either too deep, and as a result, clunky, or it’s not deep enough, and it’s really easy to use but has no depth whatsoever,” said Ansari “There’s not a lot of teams that have that attention to detail, but that’s where we’ve been able to combine this depth with an incredible ease of use.”
According to Ansari, the seed funding will be used to continue developing AutoLeap’s product and the foundation of the business, including sales and marketing.
“We want to have a great product,” said Ansari. “And once we get customers on it, we actually want to lean in a little bit on that implementation and success motion, so that people are raving about the thing once they get on it.”
Photo courtesy AutoLeap.