Backed by new ownership, the Ottawa firm that helps colleges and universities manage educational platforms and sell electronic textbooks says it’s primed to go the distance in its battle for global market supremacy.
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CEO Mark McKenzie describes Kivuto Solutions as a “small company that punches way above its weight.”
Backed by new ownership, the Ottawa firm that helps colleges and universities manage educational platforms and sell electronic textbooks says it’s primed to go the distance in its battle for global market supremacy.
Montreal-based Valsoft Corp. announced earlier this week it has acquired Kivuto in a deal that closed on Feb. 9. Terms of the transaction were not disclosed.
“We just felt it was the right fit for us,” McKenzie told Techopia in an interview this week of Kivuto’s decision to join forces with Valsoft, which specializes in acquiring software firms. “Everyone’s super pumped.”
Founded in Halifax in the late 1990s under the name PowerKnowledge, Kivuto has been a steady, if low-key, presence in Ottawa’s tech scene for more than two decades.
The company, which is currently based out of Shopify’s former headquarters at 126 York St., has three main business lines: an e-commerce storefront that uses its buying power to sell discounted education software and e-textbooks; a managed service arm that works with the likes of Microsoft and Adobe to get those software giants’ products into college and university distribution networks; and its newest offering, a cloud-based subscription platform that helps educational institutions and other clients track what software they’re using, how much they’re spending on it and whether it complies with licensing agreements.
All three segments have been booming during the pandemic as remote learning became the norm at schools around the world. Kivuto now serves students at nearly 30,000 educational institutions in more than 180 countries and works in partnership with 80 major publishing houses.
“I think a lot of schools have had a big wakeup call realizing that they really needed to get their digital act together,” said McKenzie, who joined Kivuto in 2021. “That’s really driven a compelling need for more of our solutions.”
McKenzie said the education software and e-publishing industry is “going through the same kind of transformation that the music industry went through, that movies and TV went through,” with digital content creators on one side and consumers – in this case, colleges and universities – on the other.
“There needs to be a very seamless, easy way for the two to connect through a centralized platform, and that’s Kivuto,” he said.
Armed with decades of experience scaling up tech ventures in Silicon Valley and Asia, McKenzie has spent the past two years turning Kivuto into what he now calls a “lean, mean, fighting machine.” Under his watch, Kivuto has simplified its subscription model and cut costs, trimming its headcount from about 70 to 53 today.
“We were not a best-practice software company,” he said. “There was room for me to rationalize the business, so I did that. We turned Kivuto into a very well-oiled software machine.”
After he streamlined Kivuto’s operations, McKenzie’s next order of business was finding new financial backers to help accelerate its growth trajectory.
Last year, Kivuto hired Toronto-based investment bank Origin Merchant Partners to market the company to prospective suitors, a process that yielded multiple bids despite the chilly investment climate that gripped the tech world in 2022.
“Our timing wasn’t great obviously,” said McKenzie, who will remain in his current role. “But we felt that it was important that we got to a bigger platform because we needed access to more resources to go get that (market) opportunity.
“It was very clear we were on a rapid growth path and that the opportunity ahead is even bigger than we expected before.”
Ultimately, Valsoft emerged the winner. The Montreal investment firm has a portfolio of dozens of software enterprises, including two others – SARS Software and ScholarChip – in the education space.
Valsoft focuses on buying and holding companies, with the aim of building them into sustainable long-term investments. The firm’s sales and marketing arms span the globe, McKenzie noted, giving Kivuto the kind of international reach it could never hope to achieve on its own.
“We were doing a great job, but … 53 people in Ottawa trying to serve a global opportunity is not easy,” he added. “I think this really enables us to accelerate going off to the market opportunity. We just have access to more resources.”
Valsoft executive Michael Assi said Kivuto “fits all the criteria” of a company with a high growth ceiling that just needs a bit of extra muscle to give it a lift.
“The plan is to take the business to the next level,” said Assi, the CEO of Aspire Software, Valsoft’s operations arm. “We see a lot of opportunities. I think it’s going to be one of the best assets we have.”
