An Ottawa firm that helps colleges and universities manage educational platforms and sell electronic textbooks is leaning on the expertise of a well-schooled industry veteran as it seeks to capitalize on surging demand for its software during the pandemic.
Kivuto Solutions said last week it has officially named Mark McKenzie its new CEO. The 54-year-old executive has decades of experience scaling up companies in Silicon Valley and Asia.
McKenzie, who’d already had a bird’s-eye view of Kivuto’s operations as a member of its board, hopes the wisdom he gained from previous ventures will pay off in his latest assignment.
“Software is eating the world,” said the British expat, who initially replaced former chief executive Carlos Meza on an interim basis last fall and will continue to work remotely from his homes in Lake Tahoe, Nev., and San Francisco until pandemic-related travel restrictions are lifted.
“The opportunity ahead of us is pretty large. The guys that were running the company back in the middle of last year were good guys. They got the company to a certain point, but they didn’t really have that depth of experience of taking the company to the next level. As a board, we made the decision that I was the right fit to grow the company in the next phase.”
Founded in Halifax in the late 1990s under the name PowerKnowledge, Kivuto has been a steady, if low-key, presence in the Ottawa tech scene for more than two decades.
Kivuto, which now occupies Shopify’s former headquarters at 126 York St., has carved out a profitable niche distributing software and e-textbooks to thousands of high schools, colleges and universities around the world, including the likes of Harvard, Stanford and Oxford.
The company also runs an e-commerce storefront that sells software and textbooks, using its buying power to deliver discounted prices to students and educational institutions.
Both business lines have thrived during the pandemic, which forced colleges and universities around the world to abandon in-person instruction in favour of digital classrooms.
“We’re fortunate that we’re one of those companies that benefited from the pandemic,” said McKenzie. “I almost feel guilty in saying that. Because we enable our customers to facilitate remote learning, there are certain lines of business for us that have done really well (over the) last year.”
But the new CEO believes the firm’s newest product – a cloud-based platform that helps clients manage software services and ensure they’re complying with licensing agreements – could elevate it to new heights.
Introduced last year, the subscription-based platform has already become a multimillion-dollar business, McKenzie says. It’s already being used at more than 100 schools and universities, helping them track what software they’re using and how much they’re spending on it, while also verifying that students are equipped with the proper textbooks and other educational tools.
Up to now, McKenzie says, schools have managed software and textbook inventories manually on spreadsheets or attempted to devise their own homegrown software solutions. He likens it to someone who suddenly realizes they’re spending hundreds of dollars a month on video and music streaming services they might not even use.
“Universities are very complex enterprises,” he said. “They’re made up really of a collection of fiefdoms that have a lot of autonomy. Students are changing all the time. For us, it’s a huge market opportunity.”
'New set of muscles'
But conquering such a massive untapped market requires a complete overhaul of Kivuto’s sales and marketing practices as the firm shifts from its traditional model of signing customers to long-term, perpetual licensing agreements in favour of the software-as-a-service approach, in which clients pay monthly subscription fees.
“That’s a new set of muscles for us,” McKenzie said. “We’re slowly getting that perfected – at which point we are ready to sell it to every school and university in the world. We’re giving ourselves room to adapt the company, and I think where we’ll really start to blow the doors off is in 2022.”
Now at 70 employees, the firm landed nearly $8 million in fresh equity from U.S. and Canadian investors last fall to fuel its ambitious plans. McKenzie said his marching orders from the board are clear: if retooling Kivuto’s business model means sacrificing short-term profitability for long-term recurring revenue growth, then so be it.
“We’ve now recognized we have a much larger opportunity than anyone realized,” McKenzie said. “That doesn’t mean we’re going to be irresponsible and swing for the fences. But my mandate coming in as the CEO is to grow the company.