Victoria-based background check technology firm Certn has closed a $30 million USD Series B extension to fuel its international growth.
Certn sees room to grow in Europe, the Middle East, and Africa, as well as Asia-Pacific markets, and plans to invest this capital in doing just that with the help of Export Development Canada (EDC), which led the extension round.
“In the last three months, we’ve onboarded more customers, at a higher velocity, with a lower customer acquisition cost, than any point in Certn history.”
This round comes less than a year after Certn secured $50 million USD in initial Series B financing to scale its tech beyond Canada. The additional equity capital brings the total size of Certn’s Series B round to $80 million.
EDC helps Canadian companies expand globally. As an investor, EDC will support Certn’s global expansion efforts, which the company has been focused on since the beginning of 2022 after developing its tech and building a presence in North America.
In an interview with BetaKit, Certn co-founder and CEO Andrew McLeod said the startup’s original Series B round gave Certn “the confidence to acquire licenses and be a competitor in different regions” around the world. He said this extension will allow the firm to “go even further.”
EDC provided more than $29.5 million USD of that $30 million total, with the small remainder consisting of pro-rata from some undisclosed existing Certn investors. Certn’s Series B extension gives the startup a post-money valuation of around $450 million—which McLeod claimed is slightly higher than its valuation following its initial Series B round. It brings Certn’s cumulative venture funding to more than $114 million.
Certn, which was founded in 2016, created a software platform to facilitate the pre-employment background screening process, enabling businesses to hire more quickly while also managing risk.
Amid a challenging economy and the associated wave of recent tech layoffs, McLeod claimed that demand for Certn’s tech has been strong, highlighting that despite macro headwinds, the overall labour market has remained tight and the unemployment rate is low.
“The reality is, people are still getting jobs, people are still hiring, the demand for top talent is still there, and the demand to bring good people on quickly is still crucial,” the CEO said.
In an interview with BetaKit, EDC senior vice-president of mid-market, Guillermo Freire said he sees plenty of room for Certn to grow during the economic downturn between the need for background checks in the gig economy, which Certn is targeting, to today’s globally distributed workforces.
According to McLeod, for the past two years, the talent-acquisition professionals at the clients Certn serves have been focused on hiring as quickly as possible.
“There’s a lot of potential for Certn to be that [Canadian] global champion,” added Freire, who noted that EDC’s investment in Certn fits within the export credit agency’s push to serve more mid-market firms, which EDC has identified as a “growth engine” for Canada.
Since Certn “planted large flags” abroad through its acquisitions of Credence in the United Kingdom and InterCheck in Australia last year, McLeod said that Certn has experienced strong growth and demand in both markets, as well as surrounding countries.
After generating just over $10 million in revenue in 2021, Certn surpassed $30 million last year. This revenue growth helped Certn land in second place on Deloitte Canada’s latest Technology Fast 50 list in 2022.
“In the last three months, we’ve onboarded more customers, at a higher velocity, with a lower customer acquisition cost, than any point in Certn history,” McLeod said. The company has amassed a customer base of more than 10,000 users.
After starting out 2022 with just over 200 employees, Certn is now sitting at nearly 500—a figure McLeod described as the “sweet spot.”
As Certn invests in international expansion, McLeod anticipates that the startup will make more acquisitions, describing them as a “key part” of the company’s growth strategy as it looks to enter new markets and expand both its customer base and expertise.
Feature image courtesy Certn.