By Michael Woods
Ottawa’s Assent Compliance raised one of the largest series-A rounds in Canadian history last month.
What’s driving the company’s growth?
For Assent Compliance, it all starts in the boxing ring.
The Ottawa company was founded by boxing aficionados Rob Imbeault and Matt Whitteker, two organizers of the Fight for the Cure charity boxing matches. Company CEO Andrew Waitman got involved through the ring.
Oh, and there’s a giant Olympic-sized boxing ring in the company’s new east-end office near St. Laurent Shopping Centre.
These days, Assent isn’t pulling any punches. The decade-old company had about 25 employees two years ago. Last month, it announced a $20-million equity investment, which it plans to use to expand its employee count from 165 to 265 people within 18 months.
“We made a decision that we had grown to a point where we could not organically grow for the ambition of the product and what the customers need,” Waitman said in an interview. “What is being asked of us to do is increasing quite significantly.”
The Ottawa-based firm helps clients manage their supply chain and product compliance to make sure they’re meeting regulations. Assent works with more than 30 per cent of S&P 500 product companies.
Waitman, the former CEO of Pythian, picked up boxing in his 40s and met Whitteker at a local gym. Soon, they were sparring weekly and trading shop talk between punches.
When Waitman decided to leave Pythian in August 2014, Whitteker invited him in to check out what Assent was up to. Waitman started out as a volunteer, but not long afterward became the company’s CEO.
“If you were to ask me what do we need in Ottawa to build more businesses, I would say to you we need more Matt Whitteker,” Waitman said. “He is the reason Assent exists.”
Boxing, he said, is “kind of part of our DNA now.”
“It’s unique in the sense that you see a lot of icons and emblems being put into companies, you just haven’t seen any boxing rings,” Waitman said.
The ring is not just a symbol. It gets practical use, too.
“We’re not settling HR conflicts with boxing,” he said. “But we are using it as a stage. We are talking about the metaphors of going all the rounds and what it takes to be successful. We use it to announce wins, to talk to the company all-hands and so on.”
The $20-million Series A round is one of the largest ever raised in Canada, said Waitman. The compliance industry is not a new one, so what’s driving the sudden growth now?
He points to a few factors. The industry has been around for quite some time, but compliance has been done manually, he said. The compliance and the supply chain data collection business has generally not been what you call automated yet.
Another issue is that many senior experts well-versed in compliance information are retiring.
“It’s a bit of a demographic issue,” Waitman said. “That kind of trend of having your experts retire is terrible for these large organizations.”
Another is that data are spread all throughout companies. “You need a central repository of your data to be able to do the business analysis you need.”
The vast majority of software-as-a-service companies are built on high-volume businesses, Waitman said. But with compliance complexity increasing, Assent has risen rapidly by focusing on high-value clients.
“We are in the high-value, not high-volume, business,” he said. “What that means is we’re selling to the world’s largest corporations, and we’re selling large ACV, anywhere between $50,000 and $100,000 a year and up. If you’re going to do that, you need to deliver significant value.”
That’s why the company needed to raise money quickly.
“At our core, we are a data company, and data is the new oil,” Waitman said. “We see the opportunity to be a data company with expertise and put it all together with automation.”
Cyril Cochrane, managing director of growth and transition capital at the Business Development Bank of Canada, said Assent was already growing rapidly when they first met. BDC was comfortable with the company’s subscription-based model, he said.
“We knew that as Assent were adding clients, those clients would generally be sticking for a long period of time,” he said. “So any revenue they were adding was going to stay, and they were adding it very rapidly.”
He said the bank was comfortable with Assent’s track record and the value proposition it offers its clients. He said BDC was also comfortable with the management team’s shared vision.
“All the things we liked were aligned,” he said. “Certainly the founders were young, very ambitious and extremely hard-working. Andrew does bring a level of organization and sophistication to the team, and the founders were just full of great ideas and energy.”
In keeping with the boxing theme, Cochrane likened Assent to Canadian boxer George Chuvalo, “who fought and went toe to toe with one of the world’s greatest 50 years ago.” Chuvalo fought Muhammad Ali in 1966.
“That’s what we’re trying to do with Canadian companies; help them compete on a global scale with the best of the world. I think that’s what Assent can do here.”