Every year, Techopia names a new crop of tech firms to watch. Before we unveil our picks for 2019, we’re looking back on how our four companies fared in 2018.
The bar was high for Martello Technologies going into 2018. The fast-growing Ottawa firm set lofty expectations late last year with the declaration that it would be the first local tech company in years to go public.
In the past year, Martello acquired multiple companies, more than doubled its headcount, added key executives and raised millions in financing en route to achieving its public listing; suffice to say, the firm rose to its own challenge.
Martello, which helps companies manage and troubleshoot communication services amid increasing bandwidth demands, set the stage for its transformational 2018 with a change at the top last December, bringing in John Proctor as CEO to replace Bruce Linton – who was a little busy in another exploding industry.
Reflecting on his first year in the driver’s seat during a recent interview with Techopia, Proctor was quick to credit Linton and the rest of the Martello team, who he says set the firm up for its 2018 success.
“I didn’t come into a cold-running vehicle; it was stepping behind the wheel of a vehicle already heading on a very good route.”
Acquisitive by nature
Martello made an acquisition right out of the gates in 2018, merging with Montreal’s Elfiq Networks and doubling the size of the 30-person firm overnight. The Elfiq acquisition began the company’s M&A trend and added troubleshooting capabilities to Martello’s existing solution.
Martello made its public aspirations official in April. The firm announced then it would conduct a reverse takeover of a Vancouver-based shell company to secure a listing on the TSX Venture Exchange.
In May, Martello bolstered its executive ranks with the addition of Erin Crowe as chief financial officer. Crowe came into the firm having built her business acumen across exec roles with Senators Sports and Entertainment and real estate services firm Regional Group.
Considering the financial and technical expertise the company needed to secure its public listing, Proctor puts a good deal of credit on Crowe’s shoulders for making the move happen.
“A lot of that was down to her,” he said.
Martello raised $7.5 million in an oversubscribed private placement round in June. Linton, who remains with Martello as co-chair of the company’s board of directors, said then that the oversubscribed round pointed to investor confidence in the lead-up to the firm’s public listing.
The federal government would add up to another $2 million to Martello’s coffers later in the year through its industrial research assistance program.
The big day finally arrived in September when Martello opened trading on the TSX Venture Exchange. Shares of Martello opened the first day of trading around 50 cents, jumping up to more than a dollar for a time before sinking back to roughly 30 cents heading into the end of the year.
Proctor says he’s not discouraged by the stock’s downward trajectory, attributing the drop to an overall downturn affecting publicly traded tech firms. What’s key for Martello, he argues, is delivering on the expectations it set out at the start of the year.
Still settling into public life, Martello wasted little time making another acquisition in October. The company bought Netherlands-based Savision in a deal worth $12 million, beefing up its service offerings and giving the firm direct access to the European market.
Growing pains are worth it
All of that acquiring has rapidly expanded both Martello’s capabilities and headcount, and Proctor admits that comes with growing pains.
“If you want to get to the top of the curve, you’ve got to accept there will be challenges,” Proctor says.
“A lot of people don’t grow because there are growing pains ... If you avoid all those, you’ll never grow.”
“If you want to get to the top of the curve, you’ve got to accept there will be challenges.”
Proctor’s main role, he tells Techopia, is maintaining the culture of the now-100-person firm across its organic and inorganic growth. He says that he’s “blunt” with his team about the hard work that goes into keeping Martello on the rise.
Tough talk aside, Proctor says the integration of Elfiq and Savision is going well. A dozen of Savision’s Kanata-based employees have moved into the Martello offices, and he often sees employees wearing the scarf of a colleague’s favourite soccer team – the price to pay for a footie bet gone bad.
The competitive atmosphere appears to be working: Martello was one of 10 Ottawa companies to win an Employees’ Choice Award this year.
“It’s hopping, it’s really nice to see,” Proctor says. “You see the spirit. The spirit to get things to done has been tremendous.”
Ottawa’s next anchor company?
On the business side, Martello has continued its success and garnered its fair share of attention. Following all the acquisition activity, the company reported revenues were up 92 per cent in its first quarterly earnings report earlier this fall.
Martello led local firms on the annual Growth 500 list – a ranking of Canada’s fastest-growing companies – for the second year in a row.
Waterloo tech giant BlackBerry and Kanata-based L-Spark have also seen some potential in Martello, accepting the firm into the first cohort of their joint accelerator program last week.
Though it might seem strange at first blush for a now-public company to enter an accelerator aimed at early and mid-stage tech firms, Proctor says access to BlackBerry’s R&D team is invaluable for the company’s product development. Now, rather than developing network management solutions in a bubble, Martello can work alongside BlackBerry in Kanata to create products and services that the tech firm actually needs.
“You’re inside the tent, as it were,” Proctor says.
Martello is wrapping up its year saying farewell to its co-founder, Niall Gallagher. The veteran tech exec is set to retire from his VP role with the company at the end of the year, though he’ll remain on the board of directors.
Proctor feels confident in the team he’s assembled over the course of the year. He tells Techopia that he’s proud to be building a global tech firm headquartered in Kanata, and believes Martello will become the “next anchor company” for the National Capital Region.
If its 2018 track record is anything to go by, when Martello sets a goal for itself, there’s a good chance it’ll come to pass.