VanillaSoft taps into eastern European talent with new acquisition

Telemarketing

VanillaSoft makes its money from software that helps salespeople convert leads into customers remotely, but a new deal its execs are calling a “game-changer” for the company actually resulted from old-fashioned face-to-face networking.

The Texas-based firm, which has a significant presence in Gatineau, recently added to its Canadian footprint with the acquisition of Toronto startup Autoklose. Financial details of the cash-and-share transaction were not disclosed.

Over nearly two decades, VanillaSoft has built up a loyal customer base with its subscription-based software that aims to help small and medium-sized businesses boost revenues by generating potential leads and continuously prompting sales reps to follow up with phone calls, emails, texts or messages on social media sites such as LinkedIn. 

David Hood, the firm’s Gatineau-based CEO, said Autoklose’s automated email marketing tool is the perfect complement to VanillaSoft’s current multi-channel approach. The 18-person Toronto startup has a well-established team of 13 developers, marketing experts and support staff in Romania and Serbia, giving VanillaSoft a foothold in a growing market.

“This opens up a whole other talent pool for VanillaSoft,” Hood told OBJ on Tuesday. “We’re looking at scaling rapidly. We now have (employees in) U.S., Canada, the U.K., and opening up eastern Europe as a source of talent is really going to help us as we look at scaling.”

The move drew kudos from industry analysts on Tuesday. In a note, Michael Levy, principal of Massachusetts-based marketing consultancy GZ Consulting, called VanillaSoft’s M&A play “a smart, strategic move that enhances both its email capabilities and its B2B prospect intelligence.”

SaaS North connection

Although VanillaSoft is headquartered south of the border, most of its key executives ​– including Hood and Praill ​– are based in the National Capital Region, where the majority of its employees live.

The deal was the culmination of Hood’s quest to beef up VanillaSoft’s email marketing capabilities that began more than a year ago. Chief revenue officer Darryl Praill already knew Autoklose founder Shawn Finder, and suggested Finder’s startup could be just the partner to bolster VanillaSoft’s suite of offerings. 

As fate would have it, the two companies were fellow exhibitors at last year’s SaaS North event at the Shaw Centre, where they had booths practically right across the aisle from each other. Praill introduced the two leaders to each other, sowing the seeds of what they hope will be a fruitful union.

“The fact that it was run by Canadians out of Toronto, the feel of the company is very similar, the values are very similar,” Hood said. “It’s always easier to bring employees from another company in when you already have a shared value base and way of managing.”

Unlike other mass marketing services such as Mailchimp that generally send hundreds or thousands of emails from a generic address, Autoklose is designed to send e-blasts from a marketing or sales rep’s personal account to a smaller number of high-potential targets. 

The system then delivers followup emails tailored to a subscriber’s specific interests based on the links they clicked in the original message. 

On the other end, senders are alerted the instant their emails are opened, allowing sales and marketing teams to “strike while the iron is hot,” as Praill puts it.      

Autoklose will be integrated into VanillaSoft’s multi-channel software, but it will also remain available as a standalone product for customers that don’t need or aren’t quite ready for the full offering.

Hood said the idea is for Autoklose’s system to nurture potential leads through the initial emails before the rest of VanillaSoft’s platform helps sales crews seal the deal. 

In addition, VanillaSoft customers will have the option of subscribing to or purchasing leads from Autoklose’s database of 40 million U.S. business contacts, a list that’s constantly updated by a 10-person research team. 

'A lot of strengths'

The combined firm now employs 88 people and serves a total of 1,300 customers. Both companies were already on a roll before the transaction, and Hood hopes the momentum keeps building.

“It adds a lot of strengths to the company,” he said of the acquisition.

VanillaSoft, which landed a $3-million capital investment from Quebec’s Fonds régionaux de solidarité FTQ Outaouais in the spring of 2019, battles toe-to-toe with U.S. behemoths such as Atlanta’s SalesLoft and Seattle-based Outreach ​– both of which have secured hundreds of millions of dollars in funding. 

Yet the plucky firm is holding its own, with revenues and headcount continuing to grow during the pandemic. Company execs say that while the volume of deals dropped 30 per cent or more on competing platforms such as HubSpot after the coronavirus hit, activity on VanillaSoft’s platform fell just seven per cent for the first few weeks, then bounced back.

“Here we are, kicking ass, competing and doing very, very well,” Praill told OBJ this summer. “We’ve got a company here in Gatineau that no one knows about because we’re in Gatineau. No one’s talking about us.”