Following 20 months of “laser focus” on research and development (R&D), Calgary-based software startup Symend is ready to scale its behavioural engagement platform.
Armed with over $54 million CAD (nearly $41 million USD) in growth capital led by return investor Inovia, Symend has shed staff and shifted its focus to scaling efficiently. The startup is now focused on both its existing customer base and international expansion, as well as moving into new verticals, amid an uncertain market that features both economic headwinds and tailwinds.
“We waited until this next generation of the platform was ready to really go after it. That’s what comes next.”
-Hanif Joshaghani, Symend
Symend has already been expanding at a solid clip, ranking seventh in Canada on Deloitte’s latest Fast 50 Technology list, with revenue growth of 4,366 percent over the past four years. The startup, which is on track to double the number of customers it has served for the third consecutive year, will cater to more than 40 million consumers through some of North America’s largest companies in 2022.
Symend’s co-founders claimed this fresh capital is about scaling on a global stage. Notably, though, the amount raised is mainly an inside round from return investors, and is less than half its Series B round that was raised between 2020 and 2021.
During different venture capital market conditions, Symend raised $127 million CAD in Series B funding, including an initial $73 million in May 2020 followed by a $54 million extension in February 2021.
Both rounds were led by Inovia, which has been a big investor in Symend for some time, investing in the startup’s Series A, Series B, Series B extension, and this round.
The all-equity, all-primary capital round also included return investors Impression Ventures, Mistral Venture Partners, BDC’s Growth Venture Co-Investment Fund, and BDC Capital’s Women in Technology Fund. Plaza Ventures and Export Development Canada also invested in Symend for the first time as part of the financing. The latest round brings the startup’s total funding to around $187 million CAD.
Symend co-founders chief impact officer Tiffany Kaminsky and CEO Hanif Joshaghani declined to share Symend’s valuation following this latest round, or whether that valuation increased or decreased from last year.
Speaking to the size of the startup’s latest financing relative to those prior funding rounds, Kaminsky claimed that Symend didn’t set out to raise as much money this time around. Previously, Kaminsky said the company sought out more capital because it took a lot investment to “rearchitect” its platform for scale and support its R&D plans. Kaminsky described Symend’s most recent round as “proportionate” to the startup’s growth strategy.
Kaminsky added, however, that raising capital in 2022 was a different environment. “Valuations are a lot different, the market is a lot different, it really makes you think twice … You don’t see the traditional huge rounds you saw in the past as people really want to make sure they’re being efficient with every dollar that they raise.”
“A lot of the big spending is behind them on the platform, so now this really is about go-to-market,” Inovia partner Dennis Kavelman told BetaKit in an interview.
Kavelman claimed this wasn’t a “defensive or save round” for Inovia. He emphasized that Inovia has conviction in Symend given the plan the company’s founders have laid out and how they have delivered on it to date by achieving product-market fit and hitting their milestones. He added that this funding gives Symend enough capital to execute on its growth strategy over the next several years.
According to Joshaghani, the results Symend has seen are “just scratching the surface” given that so much of the startup’s efforts to date have been focused on R&D. With its offering now ready to scale, Joshaghani said the startup is gearing up for “unconstrained global expansion.”
“We waited until this next generation of the platform was ready to really go after it,” said Joshaghani. “That’s what comes next.”
Founded in 2016 by Joshaghani and Kaminsky, Symend sells software designed to help businesses engage financially at-risk customers using behavioural science, artificial intelligence, and machine learning.
The startup’s core business involves serving major telecommunications companies and multinational financial institutions in North America. With this funding, Symend sees more room to grow both within this segment and among challenger banks, non-traditional lenders, utility companies, and insurtech firms. Symend also plans to expand its presence in Latin America, the United Kingdom, and other regions, as it looks to build out its global footprint.
Current market conditions and Symend’s shift away from tech development towards growth recently led the company to take a closer look at its spending.
Symend recently laid off around 13 percent of its now 234-person staff. According to Kaminsky, “the bulk” of the layoffs were associated with the company’s decision to focus less on tech development and more on its go-to-market team, where Symend continues to hire.
For growth-stage companies, Kavelman said it can be a tough task finding that “magic spot” between capitalizing on the available growth opportunity while avoiding burning money in an inefficient way. “I think the world’s learned that lesson in the last year, and things have pivoted,” he added.
Joshaghani claimed that Symend has seen “a big uptick in demand” for its product amid the downturn. “Protecting and expanding the lifetime value of your base customers becomes incredibly important as you move into a slower economic cycle,” he added
For her part, Kaminsky predicts that delinquency rates continue to rise over this period, making offerings like Symend even more important.
Kavelman believes Symend is in a good position to grow during what could be a prolonged economic downturn given the strength of the startup’s team, balance sheet, and product, as well as the “pretty strong tailwinds” working in its favour. “Not everybody has the wind in their face in this market.”
“You can be doom and gloom, but there are some companies that thrive in these recessionary environments … and when you’re talking about ‘future of work’ companies that are making their customers run more efficiently, it’s pretty easy to get meetings and to run the sales cycle,” said Kavelman.
Feature image courtesy Symend.