The parties declined to reveal the size of the round, though CBGF says it normally makes investments of between $3 million and $20 million. It was the first Atlantic Canadian investment by CBGF, a young $545 million fund backed by the largest Canadian banks and insurers.
Innovacorp, the Nova Scotia early-stage venture capital fund, also participated in the round as a returning investor. CBGF Senior Investor Dale Tingley and Andrew Ray, the Innovacorp Vice-President of Investment, have been named to the Proposify board.
“We’re thrilled to partner with CBGF because not only do they share our vision, but their mission of providing patient minority capital will allow us to stay in control of our business as we grow,” said Proposify Co-Founder and COO Kevin Springer in a statement. “We will also benefit from their guidance and expertise so we can continue to revolutionize the way companies sell, especially in a post-COVID-19 world.”
Proposify’s software simplifies and enhances the process of writing proposals in the cloud with online proposal design templates that can easily be customized with text, images, videos and charts. Springer and CEO Kyle Racki founded the company early last decade, and the company last raised capital in March 2018.
At that time, the company was focusing on providing software for smaller firms, and had ARR of about $4 million. It then began to target larger companies, and its sweet spot now is customers with a sales team of about 10 to 20 people. The company’s growth strategy emphasizes the “SalesTech” space, aided by Proposify’s easy integration with Salesforce tools and the flexibility it offers in branding proposals, said Racki in an interview.
He said the company’s recurring revenue increased 39 percent in 2018 and 36 percent in 2019 so its ARR is now about $8 million. Proposify supports over 10,000 customers in 35 different countries, and Racki said sales are recovering from the shock of the lockdown in March so May was the company’s best month this year.
“We’ve been able to prove there is a big need for what we do,” said Racki. “There are bigger companies getting involved … so for sure it’s getting competitive, but I think that’s also a symptom of the fact that it [automated proposals] is a big need and a lot of customers are looking for it.”
The company has now grown to a staff of about 85 people, and recently hired Vice-President of Sales Daniel Hebert and Vice-President of Engineering Jason Chakravorty. Racki said Hebert hopes to develop a sort of in-house “academy of sales” to develop a customized sales culture and increase the expertise of staff.
The timing of this funding round is important because it supports the view that Atlantic Canadian companies can close seven-figure rounds amid the COVID-19 crisis. A few deals have closed recently – Halifax’s Adaptiiv Medical Technologies closed a round of $3.4 million in April, and Fredericton’s automotive software company Potential Motors raised $2.5 million last month.
Racki said CBGF had begun its due diligence on Proposify before March, and the lockdown slowed down the process. But the parties were able to work together and close the round.
“We believe Proposify can become an international success story and we’re excited to back Kevin, Kyle and their team with our first investment in Atlantic Canada,” said CBGF Chief Executive George Rossolatos in the statement. “We have found Halifax to be a great entrepreneurial hub, and we look forward to exploring further investment opportunities in the region.”