In just two years, ShipTrack’s last-mile logistics software has already made plenty of inroads in the Canadian shipping industry.
Now, the Plantagenet-based startup is hoping to harness the power of another Ontario company’s global marketing engine to help accelerate its expansion push.
ShipTrack, which employs 62 people in Ontario and Quebec, has been acquired by Waterloo-based Descartes Systems Group in a $25-million all-cash deal that closed late last week.
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ShipTrack co-founder Shawn Winter told OBJ Tuesday that the bootstrapped enterprise had been looking for a way to break through in the lucrative U.S. market as well as build its customer base in Europe. He believes the company has found the perfect partner in Descartes, a publicly traded company that has sales and marketing staff in more than 40 locations around the world.
“We’ve done well in Canada, and we want to do a lot more elsewhere,” said Winter, whose firm has posted triple-digit annual revenue growth since it was spun off from IT services provider PiiComm in November 2018.
“We’ve done well in Canada, and we want to do a lot more elsewhere.”
“We’ve got that bench strength now. Descartes has got a phenomenal reputation in transportation logistics. Selfishly, I’m going to ride their coattails … to get exposed to some of the larger (market) opportunities.”
Winter said ShipTrack’s subscription-software platform, which companies such as Purolator employ to automate their dispatch services and track deliveries, dovetails well with Descartes’ own logistics offerings that help customers plan, schedule and track shipments as well as pay invoices and file customs and security documents for imports and exports.
He said his company’s executive team first got to know the Waterloo organization while searching for third-party investors this summer. The ShipTrack team quickly realized that joining forces with Descartes – a company with more than $325 million in annual revenues and a roster of 20,000 customers that includes the likes of Coca-Cola, FedEx, Toyota and UPS – might be the faster route to get the founders where they wanted to go.
Although ShipTrack had tentatively begun dipping its toe into the U.S. market and went as far as setting up a subsidiary in Delaware, Winter said the alliance with Descartes gives his young firm instant access to a crop of blue-chip customers that would have taken it years to cultivate on its own.
‘It’s found a really good home’
“For us, it’s a great opportunity to speak to (Descartes’) existing client base about the new offering that ShipTrack brings to the table,” he explained, adding the two sides needed little time to hammer out a deal after starting talks in August.
“It’s our baby, and I think now it’s found a really good home,” he said of the firm he helped launch.
Winter, who now takes on the role of vice-president of mobility solutions at Descartes, will remain based in eastern Ontario. With a chuckle, he noted that the two companies’ C-suite leaders had yet to meet each other face-to-face since all negotiations took place remotely during the pandemic.
“Who buys a company without meeting the people behind it?” he said, laughing. “It’s amazing.”
A newbie to the M&A process, Winter said pulling off a complex multimillion-dollar transaction in the COVID era was an eye-opener.
“It almost feels like I’ve gone through a six-month crash course in MBA school,” he explained.
A 25-year tech veteran, Winter previously held senior executive roles at Bell Canada and Motorola before joining PiiComm nearly nine years ago.
Acknowledging there’s been much hand-wringing over the years about Canadian companies – and their valuable IP – being swallowed up by larger competitors from elsewhere, he said it’s refreshing to see two firms from north of the border joining forces to tackle the global market together.
“We’re really proud this is a Canadian story. I think that’s important,” he said.
“There’s always been talk about foreign companies swooping in and taking high-tech out of our space. I’m really happy that that’s not the case this time. Frankly, we’re playing with a world-class organization now that has tentacles around the planet. It just feels right. Everything about this is perfect for us.”
