The Calgary-based startup, which sells entity management software to law firms and corporations, has laid off employees and begun re-shaping its leadership team, BetaKit has learned. In the past 12 months, Athennian has made multiple rounds of staff cuts, and seen its co-founder and COO, CTO, and a pair of VPs depart, while recruiting another two to its team.
According to Athennian, these changes are a reflection of its transition from startup to scaleup. In a statement shared with BetaKit, Athennian co-founder and CEO Adrian Camara said that the company is in “a very stable financial and operational position” and is seeing a “significant increase in demand” for its solutions this year.
“Athennian is preparing for its next level of scale following significant growth over the last three years.”
– Adrian Camara, Athennian CEO
Several posts on LinkedIn viewed by BetaKit indicate that Athennian quietly restructured and shed staff last month. Multiple sources familiar with the company’s operations told BetaKit that Athennian cut approximately 30 employees on July 5 in what marked its second round of layoffs in the last 12 months.
Those sources told BetaKit that Athennian’s peak headcount was around 100 in 2022 and at least 40 employees have been laid off or resigned since then. The company’s LinkedIn page currently lists 87 employees, down from 111 one year ago.
Athennian has also lost four members of its leadership team in 2023, including co-founder and COO Josh Malate and CTO Duane Wood, per their LinkedIn profiles. Multiple sources told BetaKit that Wood was fired in February due to differences with Camara regarding the company’s direction and leadership. According to his LinkedIn profile, Malate also left Athennian around the same time for undisclosed reasons.
In addition to Malate and Wood, Athennian VP of architecture Tami Miguens also left the firm in May, while VP of sales Jay Hedges left in August, per their LinkedIn profiles.
BetaKit has reached out to each former Athennian executive for comment. Wood declined to provide comment for this story, while the rest did not respond by press time.
In response to email questions sent by BetaKit, Athennian provided a lengthy statement, attributed to Camara, addressing Malate and Wood’s exits and the company’s prospects. The statement notes a departure of staff but does not directly address questions regarding the company’s September 2022 and July 2023 layoffs or the rationale behind them.
Athennian is “not facing any difficulties,” the statement reads. “Athennian is preparing for its next level of scale following significant growth over the last three years. We have reorganized certain teams and added new leadership to support our goals.”
The statement notes that the company has also brought on some new engineering and product leaders over the past year. In November 2022, Athennian recruited Akshay Kumar, formerly of Kira Systems and Ada, as VP of product, and last month hired ex-BenchSci SVP Asaf Inger as VP of engineering. The company is also hiring and currently has an open requisition for a new sales VP. “We will continue to add leaders with experience at our growth stage in the coming months,” reads the statement.
Camara’s statement attributes Malate’s departure to a decision “to pursue other opportunities after six years of building the company together,” noting that the former COO remains a significant shareholder in Athennian.
As for its former CTO: “Duane Wood exited the business earlier this year due to a lack of alignment with the CEO and the Board of Directors over operational decisions in the engineering team,” the statement reads. “The process of aligning the engineering team with the vision and culture of the rest of the organization included the departure of some other staff.”
Founded in 2016, Athennian describes itself as “a modern business entity and subsidiary governance platform.” The startup sells software that helps legal, tax, and finance professionals get transaction, audit, and compliance-ready, automating workflows for ownership, governance, tax, and corporate compliance.
Athennian has raised a total of around $60 million CAD to date from a group of backers that includes Centana Growth Partners, Arthur Ventures, Touchdown Ventures, BCF Ventures, Clio co-founder and CEO Jack Newton, Round13 Capital, InterGen Capital, ATB Financial, BlueSky Equities, Viewpoint Capital, Strategic Equities, and Thin Air Labs.
Early last year, Athennian announced $41.5 million CAD in Series B financing with ambitions to follow in Burnaby-based legaltech unicorn Clio’s footsteps. The round followed a period of significant growth for Athennian, fuelled by pandemic-driven digital transformation in the legal sector, increasing corporate transparency regulation, and a shift away from legacy players.
As of March 2022, Athennian had 67 employees and nearly $10 million in annual recurring revenue (ARR), according to The Globe and Mail. At the time, the company noted that it planned to use its Series B funding to hire 300 people over the next two years and reach $100 million in ARR and one million entities managed on its platform.
However, Athennian’s priorities may have changed as market conditions have deteriorated. A source familiar with the company’s operations told BetaKit that in addition to these layoffs, Athennian has partially shifted focus from law firms to corporations, which are less demanding, easier to onboard, and more profitable.
For his part, Camara noted in his statement that the entity governance software market has many verticals, from law firms to multinationals and asset management. The CEO claims that today, Athennian “successfully operates across these verticals.”
“Canadian and US law firms are a strategic market for us, and we continue to invest significantly in the success of our law firm customers,” Camara’s statement notes.
Athennian is part of a growing list of Canadian technology firms to cut costs and lay off staff amid a sector-wide downturn. This group includes Top Hat, Fable, Omnirobotic, Paper, Dapper Labs, Loopio, FreshBooks, and Symend.
Canadian companies are far from alone in making staff reductions. Per Layoffs.fyi, since the beginning of January, 952 tech firms globally have collectively shed nearly 228,000 employees—surpassing the 165,000 tech workers laid off during all of 2022.
These layoffs have come as rising interest rates have made it more difficult for startups to secure venture capital funding and increased the cost of borrowing. These conditions have led many companies to shift focus from growth to profitability. One source familiar with Athennian’s operations told BetaKit that amid the market downturn, Athennian has sought to lower its burn rate and hasten its path to profitability.
Athennian is part of a growing list of Canadian technology firms to lay off staff amid a sector-wide downturn.
According to Camara, Athennian is better positioned on this front compared to other players. “Unlike many of our smaller competitors struggling to raise financing to continue as going concerns, we have strong operating economics and substantial capital reserves, including nearly all of the capital raised in our early 2022 Series B financing,” he said in the statement.
James Lochrie, managing partner at Athennian investor Thin Air Labs, echoed this assertion. “Athennian has quickly become a market leader in their space to become an influential part of the industry,” Lochrie told BetaKit over email. “Along the way they have acquired a substantial war chest which has been shrewdly managed while the capital markets have been depressed. They continue to make improvements across the board in their continuing efforts to become a standard of corporate governance across the world.”
The company notes that it has seen “a significant increase in demand” for its solutions this year given ownership legislation such as the US Corporate Transparency Act and the Canadian publicly searchable Transparency Register for Private Federal Business Corporations.
Despite seeing some interest, Athennian currently has no plans to sell the company. “As the market leader, Athennian is often approached by parties interested in significant investments in the Governance, Risk, and Compliance (GRC) market,” the statement reads. “We have turned down all acquisition offers to date and have no plans to sell the business.”
Feature image courtesy Athennian.