Halifax data analytics startup Affinio and its 12-person team are being bought by fellow big data company NowVertical Group in a deal worth US$7.3 million or about C$9 million.

The purchase price includes US$6 million cash and US$1.3 million of shares in NowVertical, currently trading for 94 cents on the TSX Venture Exchange and valued at one dollar in the deal.

As of 2018, Affinio had raised about $17 million from investors since its founding, meaning the existing shareholders are taking a loss on the sale. NowVertical, meanwhile, has a market cap of just under $21 million.

Chief Executive Tim Burke, CTO Stephen Hankinson and several other co-founders created Affinio in 2013 to develop a platform that could monitor social media data and present a visual analysis to help users understand consumer intentions. Its goal was to break down a company’s client base and gain a deeper understanding of customers’ interests and buying habits.

Affinio’s customers include French advertising giant Publicis Groupe, food behemoth Danone and Universal Music Group.

“We’re going to add a substantial amount of commercial and customer-support resources to grow the active customer population for the products, and that will also likely include additional technology resources to support that growth,” said NowVertical CEO Daren Trousdell in an interview.

“But the management team at Affinio will be running this, and we trust and believe in their plan.”

Burke and Hankinson will stay on to spearhead Trousdell’s planned expansion, as will Affinio’s staff, bringing NowVertical’s employee count to just under 50 people.

Founded in 2018, NowVertical is officially headquartered in Toronto, but Trousdell said its workforce is largely remote and most of its staff are based in the United States. The company reported a loss of just under $8 million for the six months ending June 30 or $0.27 per share. For the six months ending Aug. 31, 2020, the company posted a loss of $23,529 or one cent per share.

Affinio, which now offers data visualization and collaboration tools for marketers who need to analyze and model consumer behaviour, recently moved to integrate its product with Snowflake's Data Warehouse -- a platform for storing data on Amazon Web Services or Microsoft Azure cloud infrastructure without the need for specialized configuration or setup.

Trousdell said NowVertical’s business has historically been focused exclusively on gathering and organizing data, and that Affinio offers a way to expand into the world of data analysis. He expects the sale to close in early November.

“Our business is purely in the consolidation space, and in the data universe,” he said. “We chose Affinio because it opened a new vertical for us in the marketing technology space. It also gave us incredible talent in Canada, where we’re really aggressively trying to grow.”

When they founded Affinio, Burke and Hankinson were pioneers of Atlantic Canada’s nascent startup ecosystem, which at the time, was largely overlooked by the rest of the country. They had previously created Tether, a product that allowed customers to get an internet connection on their laptop by linking it to their BlackBerry. Though it was eventually overtaken by new digital technology, Tether was a real cash cow for its founders for a few years. 

At its height around 2018, Affinio employed 65 people and was collaborating with Microsoft on the Seattle company’s Intelligent Customer Journey for Retail project -- an initiative to help retail and consumer goods businesses use artificial intelligence to personalize customers’ shopping experiences.