Axonify, which provides communications and training software to frontline employees, is acquiring Nudge, a startup that enables employers to engage and reward their frontline managers and staff.
Axonify claims the strategic union will offer the best-in-class tools for frontline-devoted organizations. Nudge (formerly Nudge Rewards and not to be confused with Nudge.ai) marks Axonify’s second acquisition. The financial terms of the deal, which closed on June 21, were not disclosed.
Axonify contends that the labour shortage has showcased how integral frontline workers are to the economy and everyday life, but highlighted that they are vastly overworked. Axonify considers frontline employees people working in sectors such as retail and grocery sales, call centres, and distribution warehouses.
Voluntary employee turnover has historically averaged 25 percent. But a recent study carried out on behalf of Axonify by research firm Arlington Research indicated that nearly 50 percent of frontline workers are prepared to leave their current jobs, with burnout being cited as the most common reason.
By joining forces, Axonify and Nudge claim the startups will deliver an integrated approach to learning, engagement, and execution using Axonify’s adaptive microlearning methodology combined with Nudge’s two-way communications and task management platform.
Lindsey Goodchild, co-founder and CEO of Nudge, said partnering with Axonify will extend the startup’s reach. The founder noted that Nudge hadn’t planned on being acquired.
In fact, Nudge originally set out to raise capital. In that process, Axonify and Nudge began to talk, and Goodchild said the pair came to the realization the companies were well-matched as they serve the same market but from slighty different angles.
Goodchild pushed away the idea that the deal came about because of the harder fundraising market, arguing that when Nudge began the process it was during the bull market and VCs expressed support for the deal.
“Ultimately, as we looked at what our various paths could be, it was all about for us … how can we make the greatest impact and the most positive impact on the deskless workforce,” said Goodchild. “And we felt like we could get there faster by partnering up with Axonify.”
Nudge will continue as a stand-alone brand until the end of the year, at which point it will be combined with Axonify. While teams within the startups will be reorganized, the startups said they will retain all their personnel. Nudge has some 65 people, while Axonify has about 230. The startups are already working together on product integration.
Axonify has been scaling up through a combination of organic growth and acquisitions. This marks the startup’s second acquisition after it acquired Atlanta, Georgia-based MLevel, in 2021, which offers a data-driven digital learning platform.
For Axonify, the Nudge deal enables the startup to extend its reach more quickly. Nudge currently names among its customer base Telus, Sporting Life, and Mastermind Toys. Founded in 2011, Axonify claims it serves over 160 global enterprise customers, including Walmart, Levi’s, and Merck, across more than 150 countries.
United States-based private equity firm Luminate Capital Partners acquired a controlling stake in Axonify for $313 million CAD in 2021, giving the startup a valuation of $438 million CAD.
Nudge, founded in 2013, most recently raised a $12 million CAD venture capital round in 2019. It’s backers included Chicago-based Jump Capital, BDC Capital’s Women in Tech Fund, Brightspark, Generation Ventures, and Standup Ventures, among others.
The startups have more in common that just the market they serve: both are women-led, Canadian businesses. Goodchild noted that Axonify and Nudge also share similar cultures and values.
“So as much as we weren’t planning on going down this path, as soon as we kind of recognized how impactful it could be, we both I think got really excited about it,” Goodchild said. “That’s how I’m feeling at the moment. There’s a huge, huge opportunity and we’re gonna go after it together.”
Axonify’s co-founder and CRO Christine Tutssel noted that in the frontline space it remains challenging to hire and retain staff, and she said that’s not going to change in the short term. “The ability to engage those employees effectively and allow them to know what they do, what they are supposed to do when they come to work every day is super important,” Tutssel said.
She noted that if employees get onboarded through a firehose approach that they start working and don’t understand what they’re supposed to do. A lack of ongoing communication and support exacerbates the situation, and they end up quitting, she claimed. Tutssel said it’s vital to provide an environment where the workforce is engaged, and that companies need to keep their employees connected, on-board, and excited to be part of the brand and overall experience.
“Those are the things that we’re hearing from our customers and hearing from companies in the marketplace,” Tutssel said. “The time could never be better to really bring something together for the frontline.”
Goodchild noted that the market has been asking for one solution that will do everything for frontline employees. She said up until this point there have been a number of disparate solutions for things like scheduling, alerts and so forth.
So being able to bring everything all together to meet the needs in a really seamless way, is something that I think is going to be very, very powerful and disruptive,” Goodchild said. “And together we’re going to achieve that.”
With files from Meagan Simpson.
Image courtesy from Nudge.