While Ottawa-based supply-chain software powerhouse Kinaxis grabbed the spotlight during the pandemic as demand for its products skyrocketed, another local firm that helps manufacturers manage their raw materials quietly set the stage for a history-making fundraising effort.
Assent Compliance – whose platform ensures that some of the world’s biggest companies and their suppliers comply with an ever-growing list of government regulations on everything from human rights to health and safety standards – announced Thursday it has raised US$350 million in fresh capital to fund its ambitious global scaleup plans.
“I think for Ottawa, I think for Canada, it’s a great story,” CEO Andrew Waitman says.
The Ottawa Hospital’s future neuroscience institute ‘a game changer’ for ground-breaking treatment
The new neuroscience institute will provide a hub for brain-related researchers and clinicians – one of the strongest of its kind in the world.
North America’s largest green-building research centre opens in Ottawa this summer
The size of the CABER building – located on NRCan’s CanmetENERGY campus in Bells Corners – is something to behold.
Valued at more than $445 million in Canadian funds, Assent’s latest round is among the largest in the capital’s history and brings the firm’s total VC haul to $640 million.
Austin, Tex.-based Vista Equity Partners led the latest round, Assent’s fourth venture capital deal in the past five years. U.S. private equity firm Warburg Pincas, which financed Assent’s previous $160-million series-C round in 2018, remains the firm’s largest shareholder, while past partners Volition Capital, First Ascent Ventures and StepStone Group all remain investors in the company.
Although the privately held firm doesn’t grab headlines with the frequency of some of its better-known publicly traded tech counterparts such as Shopify and Kinaxis, Assent has vaulted into the front rank of local software enterprises with a market valuation of more than $1 billion.
As regulations governing the components that go into complex goods such as cars, medical devices and airplanes grow more complicated by the year, Assent’s software has become must-have technology for some of the world’s biggest manufacturers in the industrial, automotive, electronics, aerospace, medical and oil and gas sectors.
“If you looked at our customer list, you would know all of them,” Waitman says.
The firm’s ascent has accelerated as widespread supply-chain shortages plagued the global economy during the COVID-19 crisis, he explains. Meanwhile, environmental and social issues have also become hot-button topics, Waitman adds, forcing manufacturers to take a closer look at where and how their raw materials are sourced.
Revenues up 50%
In the past year alone, Assent’s global headcount has jumped by 35 per cent, while its annual recurring revenues have risen by more than 50 per cent. Its global workforce now tops 800, with about 450 of those employees here in Ottawa.
Assent’s employee count has risen by nearly 40 just since the start of 2022, and Waitman expects that hockey-stick growth trajectory to continue as Assent continues to sign new clients and expand its footprint in North America, Europe and Asia.
Before the year is out, he expects the firm to employ more than 1,000 people as it looks to cement its unicorn status.
“Everybody is paying attention to sustainability and (environmental, social and governance topics) right now,” says Waitman, who joined the company as chief executive in 2014.
“We are the market leader. To maintain that and grab market share, that’s the biggest thing.”
“It’s a big market opportunity. We are the market leader. To maintain that and grab market share, that’s the biggest thing.”
Bootstrapped early on, Assent has tapped into the equity markets in a big way over the past five years.
Waitman says investor interest in the firm picked up early in the pandemic as supply-chain concerns became a widespread worry. Still, he says the company wasn’t planning to dive back into the VC pond until at least 2023.
Then Vista came calling. The 22-year-old Texas firm has a track record of helping tech enterprises such as marketing automation software maker Marketo scale into global giants, and the record-breaking deal came together within months.
Vista’s Foundation Fund, which typically invests in mid-market companies, led the new round. Foundation Fund co-head Patrick Severson and managing director Jake Hodgman will join Assent’s board of directors.
“It’s nothing short of amazing the resources that they can pull on,” Waitman says, adding that Vista also has a history of fruitful collaborations with Warburg Pincas.
“The party you bring to the table, if they already have working relationships, helps in (building) that kind of chemistry,” he adds.
As the company continues its rise, Waitman says he’s not ruling out all possible avenues for future growth, including a potential IPO. But for now, he says, taking Assent public is not at the top of his agenda.
“The difference today is that there’s so many large (VC) funds out there that it’s not your only form of liquidity any more,” he explains.
“But if you are a truly global player, (going public) has benefits,” he adds, citing market credibility and the ability to raise capital more quickly to fund acquisitions as examples. “Do I see it as a high probability in our future? Absolutely, I do. I’m not preoccupied with it, and now I don’t need it for my balance sheet in the short term.”