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Solace to ramp up R&D after landing $10M in fresh federal funding

July 25, 2023
3:24 PM
ET

Solace says it expects to hire up to 150 new employees over the next two years after landing $10 million in federal funding to expand its software platform.

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Solace says it expects to hire up to 150 new employees over the next two years after landing $10 million in federal funding to expand its software platform. The Kanata-based firm received the cash from the National Research Council Industrial Research Assistance Program. The grant, which will be spread out over the next three years, is aimed at helping the company that was founded in 2001 with backing from tech magnate Terry Matthews add new capabilities to its tech stack. “They have been looking to fund bigger projects for more strategic ideas for companies of our size,” Solace CEO Denis King said of the NRC. “We’re pretty happy.” Solace’s software helps smooth the flow of wireless traffic between points such as mobile devices and data centres. Nearly 300 customers, including retail giant Ikea, U.S. supermarket chain Kroger, carmaker Renault and financial institutions such as Barclays and RBC, use its products to ensure that transactions like online purchases and bank withdrawals happen as quickly and seamlessly as possible. Demand for the platform has soared as the number of wireless devices that communicate with each other rises and ongoing global supply-chain disruptions have made the need for real-time inventory updates more important than ever. The firm’s annual revenues are now well over the $100-million mark, and King – who told OBJ last year that “the path to a billion (dollars in annual revenues) is not unrealistic” – remains confident that Solace will eventually hit that target. Annual recurring revenues, a key metric for the subscription-based software company that bills customers by the month, are growing at about 30 per cent. Meanwhile, Solace’s net dollar retention – the share of revenues it retains from existing customers each year – typically ranges between 120 and 150 per cent, meaning the firm signs up far more new clients than it loses over the course of a year. “A billion dollars is a ways out, but certainly is still the north star,” King said.

'Everything is out of sync'

For now, the firm is focused on further building out its platform so it integrates more efficiently with inventory management systems and customer relationship and HR management software such as Salesforce and Workday – so that “the second anything happens, every other system knows about it and everybody's in sync,” King explained. “That’s one of the biggest issues with retail today – everything is out of sync, from purchase to back-end systems. And that’s a big part of what we’re trying to change.” Now at 537 employees, Solace is aiming to nearly double its headcount to 1,000 before the decade is out as it ramps up its research and development efforts. Even as some customers have cut back on spending amid global economic turbulence, King says Solace’s fundamentals remain strong. “While I worry about the market, I feel like all of our key metrics are as good or better than most other companies that I’m dealing with and that I see,” he said. “It’s really important to get all of those metrics right, and that’s been a big push for us over the last 12 months.” The CEO said an initial public offering is also part of the company’s long-term vision. “Obviously, there’s a lot of things that have to be right and the investors have to be on board, but definitely, taking the company public is something we aspire to do,” King said. “We really want to continue to put Solace on the map here in Ottawa and grow the business as fast as we can.”