After years spent searching for the best path to scale up and take on Canada’s cloud communications market, Ottawa-based Versature has decided being acquired by a larger firm is best way to grow.
The VoIP phone services provider announced Tuesday that it had been acquired by net2phone, itself a subsidiary of New Jersey’s IDT Corporation. Financial details of the deal were not disclosed.
Versature is a cloud communications firm targeting small and midsize businesses. It’s been in business for nearly a decade and a half, but has picked up steam in recent years. In 2017 the firm was named one of OBJ’s fastest-growing companies and just last week landed on the 2018 Growth 500 rankings with five-year revenue growth of 263 per cent.
It’s done all this without giving up equity, having bootstrapped the business aside from a couple million dollars in debt financing.
"We have always tried to get the biggest bang for the lowest buck of programming."
“We have always tried to get the biggest bang for the lowest buck of programming,” says Versature president and chief operating officer Jonathon Moody.
Moody tells OBJ that the company has spent the past three or so years searching for the right way to scale its solution, which these days has grown to include business intelligence solutions and integrations with CRMs such as Salesforce.
Versature found net2phone this past winter. The global telephony firm has boots on the ground in markets such as Brazil and Mexico, and sees the Versature acquisition as an entry point into the Canadian market.
Moody says that net2phone was specifically impressed with Versature’s sales team and how it’s positioned itself as an alternative against heavy hitters in Canada such as Bell and Rogers. He adds that there’s strong alignment between the two companies’ culture.
The acquisition will give Versature access to net2phone and IDT’s expertise and a larger pool of capital. Moody says being part of the larger organization will reduce the “cost to innovate,” and give the Ottawa firm new strategies to tackle the rest of Canada. The company is largely focused in Ontario but roughly a quarter of its business is currently west of its home province.
While Moody says there won’t be any cuts to the 44-person firm – in fact he’s projecting they’ll hit 60 in their east-end offices within the next year – current CEO and founder Paul Emond will not remain with the organization going forward.
With net2phone’s resources at hand, Moody expects hiring to get a bit easier. He says Ottawa is a tough market today to sustain growth, but the backing of a larger organization should help the firm lock down the talent it needs to scale.
“Having a little bit more capital behind us to be able to go out and make those key acquisitions is going to be important for us to keep it up,” he says.