Three years after it began investing in startups, Halifax’s Concrete Ventures has booked its second exit. Whitehorse-based Proof, which specialized in automating government processes, has been bought by Toronto’s Daylight.

Daylight Co-Founder and Chief Growth Officer Art Harrison said his company bought Proof to bring on the target company's staff -- a process known as an "aquihire" -- and Proof’s software product will be discontinued. Daylight is working with customers to help them find alternate solutions. Seven people from Proof’s team will join Daylight, including founders Ben Sanders and Wesley George.

Proof’s Whitehorse office space will also stay open as part of Daylight’s hybrid work model, which allows employees to choose whether to work from home or the office.

“(Proof) shared a similar mission to us, where they were helping reduce and remove paperwork and bureaucracy for the government,” said Harrison in an interview. “And they were leveraging the Daylight platform as part of their collection of offerings."

Founded in 2016 with offices in Halifax and Yukon, Proof set out to digitize the decision-making process for governments to end the practice of moving papers from office to office for endless edits. (For example, Proof helped the Yukon government implement its COVID-19 screening process.) Since its inception, the company went through the Creative Destruction Lab and Techstars. Its headquarters was solely in the Yukon capital by the time of the sale. 

Daylight, also founded in 2016, offers backend software that automates business processes for industries including banking, healthcare, insurance and public-sector work, the latter of which was Proof’s specialty. In September, Daylight closed a US$12.3 million USD (C$15.7 million) funding round. 

The merger came about because Proof was one of Daylight’s clients, and with a tight labour market, Harrison said the prospect of adding a handful of new employees who were already familiar with the Daylight software was too appealing an opportunity to pass up.

“It shows how competitive the market is, obviously, finding great talent today,” he said. “But it also makes us feel really excited about our future.

“I think one of the things that we're really excited about for the Proof team in particular is they've demonstrated the ability to bring such great value in the government space.”

Concrete Ventures was launched in 2019 by General Partner Patrick Hankinson, who had sold his own company Compilr to Lynda.com (now part of LinkedIn) for more than $20 million. The fund’s previous exit was Halifax-based SalesRight, which had 11 employees and was bought by Santa Barbara, Calif.-based FastSpring in November 2020 and is now called FastSpring Ineteracrtive Quotes.