Ottawa software startup Corfix recently secured a new capital investment from Miami-based Reformation Partners.
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Five years after embarking on what they call their “prototypical bootstrap founder journey,” Ottawa entrepreneurs Shawn Watts and Jeff Burns are turning to a U.S. investor to help them navigate their road to growth south of the border.
Their software startup, Corfix, recently secured a capital investment from Miami-based Reformation Partners. Watts says the new funding raise will provide his fledgling firm, which specializes in software that helps construction companies manage job sites and employees, with the financial wherewithal it needs to penetrate the massive U.S. market.
“We’ve clearly established product-market fit here in Canada,” says Watts, noting that most of the construction firms that now use Corfix’s platform are based on this side of the border. “Our goal is really to expand (into the U.S.) as that market is obviously so much bigger.”
Corfix’s southern push marks the next chapter in a growth story that reads almost like a Hollywood script.
The company got its start back in 2019, when Watts – who had long been frustrated with the amount of paperwork he had to do as a construction worker – suffered a severe job-site injury that almost cost him his leg.
Watts turned that misfortune into opportunity. In quintessential startup fashion, he and his friend Burns decided the time was right to strike out on their own and sketched out the concept for their venture on a napkin while sitting in a restaurant.
Backed by about $3 million in money from their own pockets, angel investors and government grants, they built Corfix into an enterprise which now has 32 full-time employees and several hundred customers across Canada as well as in nine U.S. states.
Corfix’s subscription-based software platform aims to streamline virtually every aspect of the business side of construction. For example, it allows workers in the field to quickly clock in at job sites, fill out time sheets or sign safety-compliance forms right from their phones, while providing front-office managers with tools to track spending, assign tasks and monitor training and safety issues to ensure all regulatory requirements are being met.
Watts says the software is rapidly becoming a must-have in an industry that traditionally has been slow to adopt new technology because it solves a huge “pain point” for contractors and their employees.
“A worker just wants to build – they don’t want to do the paperwork,” explains the construction worker-turned-CEO.
“Building a product that gets them to work faster with the least amount of friction as possible is the mission in product development. We feel like we’re there. We don’t have any big, structural changes to make – just some improvements on the current (customer) experience.”
Bootstrapped beginnings
True to his roll-up-your-sleeves-and-get-to-work roots, Watts prides himself on Corfix's ability to grow without outside funding. But he also realizes that if the company really wants to make inroads in the U.S., it needs much more capital, not to mention expertise in establishing a foothold in a foreign market.
The firm heard from “many different VCs” over the past four years, he notes, but the founders wanted to wait until they found a partner “who believed in the mission,” as Watts puts it.
He says they’ve found exactly that in Reformation Partners. The Florida firm’s portfolio features several other startups that also specialize in workplace-management software – including Tough Leaf, a New York-based company that helps general contractors comply with subcontractor sourcing requirements.
Reformation executives initially met with Corfix’s leaders about a year and a half ago, but “the timing wasn’t right” for an agreement at that point, Watts says. The two organizations picked up their talks again in late July, and this time negotiations progressed quickly.
Watts says the VC was impressed with Corfix’s trajectory from a firm of about a dozen employees, 30 customers and less than a million dollars in annual recurring revenues at the start of 2022 to the rapidly growing enterprise it is today.
“It felt like they wanted us and they really believed in the mission, believed in the company,” Watts says. “That growth that happened from the first time we had met really validated a lot of the other question marks there were throughout the process. It really got us to a place where it made sense on both sides to get a deal done.”
Reformation managing partner Andrew Oved said the Ottawa firm’s technology fills a major void.
“We spoke with a variety of leaders in the construction industry, ranging from developers to subcontractors to GC site safety managers, and the message was clear: there is a real need for a worker-first solution like Corfix in the U.S. market,” Oved said in a statement. “We're excited to partner with Corfix as they expand in the U.S. and continue to revolutionize the adoption of construction technology.”
Reformation will now take a seat on Corfix’s board of directors and help shepherd the company on its expansion path as it seeks new strategic sales partners, targets customers in “high-worker-density, infrastructure-spend and regulatory environments” in the U.S. and looks to hire seasoned executives who can help it scale up.
Watts can’t wait to see where the partnership takes Corfix as it writes the new chapter in its growth story.
“We’ve gotten this far because we’ve surrounded ourselves with smart people who have been there, done that,” he says. “We’re just continuing to bolster that team with this deal.”
