Less than four months after it finished raising a $13 million funding round, Halifax Software-as-a-Service company Proposify is laying off 25 people as part of what CEO Kyle Racki described as an attempt to “right-size” the company after missed growth targets.
The September raise took about a year to close and was led by Innovacorp and the Canadian Business Growth Fund -- an investment fund backed by major financial institutions, including Royal Bank of Canada and Toronto-Dominion Bank. In a statement posted on social media Wednesday, Racki said Proposify, whose software automates the proposal-writing process, had increased hiring last year, growing the company from the 85 people it employed in 2020.
But Racki said the new hires were onboarded “ahead of revenue,” and the “aggressive” growth targets he set have not panned out.
“The future is bright but to get there we have to get lean and refocus,” wrote Racki. “As a result, we’ve just released some really amazing people into the job market.”
Proposify’s software simplifies the process of writing proposals in the cloud with online proposal design templates that can be customized with text, images, videos and charts, as well as including document sharing and e-signing features. Racki co-founded the company with Kevin Springer -- now the president -- early last decade. By 2020, the business employed about 85 people.
As recently as 2018, the company was targeting small and medium-sized companies as its clients, and was booking annual revenues of about $4 million. It later 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 was aided by Proposify’s easy integration with Salesforce tools and the flexibility it offers in branding proposals, Racki told Entrevestor in a 2020 interview.
He said at the time the company’s recurring revenue had increased 39 percent in 2018 and 36 percent in 2019. And in his statement about the layoffs, he pegged 2021 revenue growth at 18 percent. The company has over 10,000 clients.
Racki invited anyone interested in hiring some of the laid off employees to contact him.
“We want to support everyone as much as we can in their career transition so if you’re looking for great people, please contact me as I may be able to connect you with your next star employee,” he said.
“Since the beginning, I’ve been fortunate to find smart, talented people to help build Proposify into what it is today. Today we said goodbye to some of them.”