Build Ventures, the Atlantic Canadian seed-stage venture capital firm, has announced the initial close of its second fund at $50.5 million and has invested in a $2.9 million round by Saint John-based Gemba Software Solutions.
Led by partners Rob Barbara and Patrick Keefe, Halifax-based Build launched its first fund in 2013, announcing a first close of $48.5 million but ending up with a fund of $65 million that backed 14 companies. Build ended its investment period with the first fund in late 2017, and the principals have been working since on bringing in new capital for their second fund.
The Build Ventures II limited partners, many of whom come from the public sector, have committed an additional $8.5 million to the fund as long as Keefe and Barbara can attract $5 million in private funding. That would bring the total value of Build Ventures II up to at least $64 million.
“Our first fund supported some of the region’s top startups, helping drive innovation,” said Barbara in a statement. “Launching Build Ventures II means we will continue to find and invest in companies with strong growth potential.”
Added Keefe, the fund’s Managing Partner: “We continue to be impressed with the growth of the ecosystem and the quality of companies emerging throughout Atlantic Canada. . . . With Build II, we look forward to helping more companies in the region explore and perfect the science of scaling up, allowing them to expand into new markets.”
The limited partners in Build Ventures II include the governments of New Brunswick and Nova Scotia, BDC Capital, and the Government of Canada’s Venture Capital Catalyst Initiative, as well as some private investors.
Making its first investment in a new company in almost two years, Build Ventures has now invested $2 million in Gemba Software. Its flagship SaaS product ProcedureFlow helps call centres provide all employees the information they need to answer questions thoroughly and immediately.
Gemba Software began in 2015 when it was spun out of Saint John tech services company Innovatia. It secured $2 million in equity funding from Innovatia and the New Brunswick Innovation Foundation and was headed by tech veteran Daniella DeGrace, who had previously worked for such successful startups as Radian6 and Q1 Labs.
NBIF invested again in the current round with a $600,000 contribution, while Innovatia has invested a further $300,000.
Gemba’s mission was to sell a digital product developed by Innovatia that helped corporate clients simplify complicated procedures for employees. Some companies – especially those with call centres, or contact centres -- need employees to understand hundreds or thousands of business procedures. ProcedureFlow provides companies with a series of flow charts and digital tools that help to train employees and let them find information more quickly.
“With ProcedureFlow, we’ve helped our clients increase productivity and, importantly, we’ve supported our clients’ growth through visual knowledge transfer, resulting in an enhanced customer experience,” said DeGrace in the statement.” This significant investment will help us grow ProcedureFlow and scale up our operations.”
In an email, DeGrace said the company, which now has 14 employees, has attracted customers around the world, and they have found ProcedureFlow cuts operation costs by up to 11 percent and employee training time by up to 90 percent.
She said the company “will use this investment to accelerate our growth to meet our large market opportunities. In the next two years, we'll be adding [about] 40 employees in business development, customer success as well as a significant increase in our software development team.”
Disclosure: Build Ventures is a client of Entrevestor.