Introhive, the Fredericton- and Miami-based maker of AI sales software, announced Wednesday it has closed a mammoth US$100 million ($122 million) Series C funding round -- the largest equity investment deal in New Brunswick history.
The round was led by Boston-based PSG, which specializes in backing middle-market software companies. Introhive declined to disclose its valuation, which would have revealed whether it has become the second Atlantic Canadian tech company to become a unicorn.
The only Atlantic Canadian company to raise more is St. John's-based Verafin, which closed a C$515 million growth capital round in 2019 before being sold to Nasdaq for US$2.75 billion last November. But the Verafin deal was a mix of equity and debt, and the company did not disclose the breakdown.
“For us, (the raise) is about continuing to evolve our platform, innovating on technology, staying ahead of our competitive product roadmap, and ensuring the success of our employees,” said Global Vice-President of sales, Adam Draper in an interview.
Introhive sells AI-based customer relationship management, or CRM, software. It uses artificial intelligence to identify data stored in companies’ tech systems, and help them to use it to increase revenue and improve productivity. The co-founders, Jody Glidden and Stewart Walchli, are serial entrepreneurs who previously sold two companies to Blackberry, then called Research in Motion.
Introhive has now surpassed US$20 million in revenue and Glidden expects it will hit $100 million by the end of 2023. He said the sales growth has been facilitated by Introhive’s own software, on which the company has been leaning heavily.
“I think using Introhive at Introhive has always been one of the reasons that we've grown so fast,” he said. “I remember in the early days, when we couldn't get leads, we used our software to tap into the networks of our highly connected investors and advisors to create introductions and get some of those first sales.”
Other investors in Wednesday’s round include the Business Development Bank of Canada, Aegis Group Partners, California’s Evergreen Coast Capital, New Brunswick Innovation Foundation, and British Columbia’s Mavan Capital Partners. Bank of America Securities was the investment bank representing Introhive.
Draper said the US$100 million will be spent mostly on continuing to develop Introhive’s technology, as well as on new hires in sales and marketing. The company currently has more than 300 employees and plans to reach 400 by the end of the year, with the capital raise helping to pay for the new hires.
Glidden said a chunk of the money could also go towards acquisitions, although he does not yet have his eye on specific companies.
“At the moment, our primary goal is to grow as fast as we can possibly grow,” he said. “And we don't want pure organic growth to be the limiting factor. So with this amount of money, it just gives us the option (to buy) companies that maybe did well in a certain vertical but couldn't expand beyond that... or maybe had some sales hiccups, or whatever.”
Founded in 2012, Introhive has offices in Fredericton, Miami, Saint John, Halifax, Washington, D.C., Chicago, London, India and elsewhere.
In 2019, it became the first Atlantic Canadian business to crack the Deloitte Technology Fast 50, a national competition that ranks entrants based on four years of revenue history. At the time, Introhive had seen its revenue grow 1,700 percent over four years. Last year, it ranked at No.19 on the Deloitte Fast 50 with revenue growth of 938 percent between 2016 and 2019.
Wednesday’s Series C round brings the total capital raised by Introhive to US$143 million.
Draper said the most recent raise was made possible by Introhive’s handling of the pandemic, which saw it double down on optimizing its workflow and sales processes.
“We really focused in 2020 on scaling what I call the operational, the core parts,” he said. “Anytime you're scaling, especially in my world, from a sales perspective, it's easy to put the sales bodies in place, but you have to have the infrastructure to support that. And so we put a lot of time into process workflow, our tech stack, but also our strategy.”