BNOTIONS acquired by Symbility Solutions for $5 million

After a nine-year ride, BNOTIONS, the Toronto-based mobile, data and analytics innovation firm, announced today that it was acquired by Symbility Solutions for approximately $5 million in cash, shares, and options. A recent Deloitte Fast 50 winner, Symbility predominantly creates products in the health and insurance space, and has followed last year’s impressive growth numbers with expansion into the UK and the recent acquisition of The Innovation Group.

In this exclusive interview with Alkarim Nasser, Chairman of Gallop and founder of BNOTIONS, and Paul Crowe, CEO of BNOTIONS, BetaKit got to talk space, global ambitions, and new beginnings.

By all accounts, you’ve been doing quite well. Why did the acquisition by Symbility Solutions make sense, and why now?

AN: An entrepreneur needs to constantly evaluate all the opportunities, even the ones that may seem the most unlikely. We knew we had to make a move. Ultimately, we were looking for rapid growth.

PC: Over 50% of our revenue came from international clients, and we wanted to take BNOTIONS global. Through that exploration, we found a partnership that quickly turned into acquisition.

How did the conversation begin? How long did it take, end-to-end to arrange all this, and what does it mean for the company?

AN: We were getting offers from different companies for several months.

PC: We spoke to many networks and companies, and felt that most valued us for the revenue and profit. Symbility Solutions creates innovative products in the health and insurance space. We’ve been doing a ton of work in insurance and health and finance verticals. Symbility Solutions has over ten years of experience doing innovative work in the field. They were also a startup once, built by two Canadian entrepreneurs who took Symbility Solutions global. As for BNOTIONS, we are keeping our name, our office, our autonomy, and we’re gaining the partner who can fuel our growth.

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Was there complete agreement on the acquisition front, or did you go through fiery discussions, fights, and compromises?

AN: Over the years we created an incredibly passionate and driven leadership team who all shared common beliefs and values. This group became the BNOTIONS partner team, comprised of people with different backgrounds, expertise and walks of life, including my father, Diamond Nasser. The diversity of our team brings together a great number of perspectives. Half of the leadership team was working on Gallop when the acquisition talks began. Paul and the remaining team drove the due diligence to make sure there’s a common vision, culture fit, growth opportunities, and fair compensation. Having been in the service industry for nine years, I was looking to do something that was more product-focused, and the prospect of focusing 100% on Gallop became a really fascinating opportunity for me. But this acquisition process started before I left for Gallop, and I was largely driving down that path in the first place.

Looking back at the early days of BNOTIONS, how did it all start, and was there anything you’d do differently?

AN: BNOTIONS started in 2006, when I started freelancing back in 2006 under the brand Bogaroo, which I defined as “he or she that allows the conveniences of technology to pass them by.” My freelance network was growing pretty quickly. When I went to Seneca, I sold my classmates this idea that we should monetize our homework. After graduation a few students stuck around, namely Mark Reale, Logan Aube and Aaron Ritchie – together we incorporated the sole proprietorship and started operating as BNOTIONS (Bogaroo’s Notions). In reality, we had a common goal, this crazy dream to go to space, namely to build interfaces for a spaceship.

BNOTIONS team, celebrating the arrival of their first air conditioner.

BNOTIONS team, celebrating the arrival of their first air conditioner.

PC: This idea of going to space felt attainable but unattainable at the same time. We wanted to build something that goes to space, and that meant constantly chasing cutting edge of whatever is coming next, what’s innovative. This mindset might just lead us to space one day, somehow.

You’re an agency in a service business. As you know, there’s a conversation about the business of services and design in particular with Heist closing and Teehan + Lax closing shop, and others walking a thin line to keep the lights on. What was your approach to business, talent, and growth?

PC: Looking at the world of service business, few industries had to go through this much change so quickly. While brand design and direction is being brought in house, lots of companies are outsourcing as much as humanly possible. Four-five years ago, procurement would never even be involved, and now that’s often the first conversation we’re having. We decided we would only work on projects directly with clients. When we control the relationship, we ensure our work would be valued. We also turned down any campaign work, any technology or project with an expiry date to it, and we said no to microsites. We believe in products, not campaigns, and direct relationships with clients. We always look for the opportunity to do the most innovative work.

So, now that you’ve been acquired, how do you feel? What’s it like on the other side?

AN: It’s been an incredible journey, and it feels more of a beginning than an end. Many companies end up losing their name, moving offices, and we’re getting acquired by a tech company that wants us to just continue to grow the brand and evolve. I can almost imagine how a parent feels when their kid goes off to university. BNOTIONS will always be the baby grown out of my parent’s basement. I’m excited for the future of the business. Also, we’ve made some traction in the pursuit of space – we’ve won NASA hackathons and talked to Richard Branson; whatever happens, we’ll remain space geeks.

PC: We’re celebrating for sure. We have a great partner in Symbility Solutions, which values our skillset and the perspective we bring from working in other industries, like retail and finance. It’s massively important that our team will continue to see a ton of challenges. We won’t be coming to the office every day thinking about the same problem, and that’s what attracted our people to us in the first place. Everyone is very excited! 100% of the team has signed on to continue.

What would you say to people about the $5 million acquisition price in the current economic climate?

AN: Service businesses have very different valuation models than your typical product technology company that people are used to seeing headlines about on BetaKit. We agree the dollar figure mentioned sounds low for the value BNOTIONS represents, but BNOTIONS is still going strong. The company will continue thriving and creating value and now the entire public can participate in this value creation through the Symbility stock on the TSX venture. We’re extremely happy with deal.

We have to remember this also wasn’t a venture-backed business. This was a bootstrapped out-of-the-basement kind of business. The only investment was 30k on my personal credit cards and a lot of sweat from a great team. By that math this was a 150x+ return.

PC: I think the most important thing for people to understand is that we are still playing the long game. We fully expect the stock price to grow – a 15 cent increase in stock price adds about $1.5M to the outcome.

We’re not done with this move – we are just getting started 🙂

Elena Yunusov

Elena Yunusov

Elena Yunusov works at the intersection of digital communications and experience design. She is known in Toronto’s startup community as a HoHoTO & Toronto Maker Faire co-organizer. She likes coffee, robots, and wearable tech.