Saskatoon restaurant scheduling company 7shifts raises $10-million in financing

Open this photo in gallery:

Coming from a family of quick-service restaurateurs, Jordan Boesch can vividly recall his father’s desk covered in sticky notes with staff shift requests. So after teaching himself to code, he set out to make that all-consuming task simpler – at least for his father’s Quiznos locations in Regina.

About five years ago, that idea became a full-fledged company: 7shifts Employee Scheduling Software Inc. And since then, the restaurant industry has taken notice of the Saskatoon company, with more than 250,000 workers and 10,000 locations using the cloud-based software that simplifies scheduling and communication with employees about their shifts into an app.

“We took the biggest problem that restaurants face today, which is labour, and asked, ‘How can we do this 10 times better?' ” Mr. Boesch, 31, the company’s chief executive, said in an interview this week. “… We believe scheduling should happen automatically instead of sitting in a back room with a bunch of papers trying to figure it out.”

After several smaller rounds of funding, 7shifts will announce on Thursday that it has raised US$10-million in financing, led by New York private-equity group Napier Park Financial Partners alongside New York’s Teamworthy Ventures, Toronto’s Relay Ventures and U.S. hiring-service entrepreneur Peter Harrison. The venture-funding deal is a milestone for Saskatchewan – the biggest cloud-tech deal in the province since 2013, when the Canadian tech sector began to mature after the financial crisis, according to data from the Canadian Venture Capital & Private Equity Association (CVCA).

7shifts uses artificial-intelligence technology to predict staffing needs based on everything from historical sales to the weather – which it says can help restaurants become more efficient and profitable. Mr. Boesch said he wants to invest the new capital in machine learning to help operators build what he calls “the perfect schedule,” forecasting sales and staffing needs with a level of accuracy that exceeds the 90 per cent the company claims now.

He also hopes to expand the company’s product-development and sales teams in Saskatoon and Toronto, with the former honing in on helping restaurateurs stay compliant with their local labour laws. And while 7shifts served mainly independent restaurants in the beginning, Mr. Boesch said he hopes to partner with more large brands, such as the Canadian chain Smoke’s Poutinerie, which has become one of the company’s biggest clients.

Jason Evanochko, who owns and operates a Smoke’s location in Saskatoon, says he adopted 7shifts software within months of opening in 2015. Mr. Evanochko had grown frustrated with spending two or three hours planning employee schedules in an Excel spreadsheet after 16-hour restaurant shifts.

“Being able to have this kind of software, for any business, is paramount in today’s market, with costs continually being driven up,” he said. He let other franchisees know about 7shifts, he said, and its product has been adopted widely within the chain.

7shifts was officially founded in 2014 by Mr. Boesch, his wife Andrée Carpentier and Johannes Lindenbaum – its vice-presidents of product and engineering, respectively – but began as a side-project for Mr. Boesch as he and Ms. Carpentier moved between Ottawa, France and Saskatchewan for school and work. After the co-founders took part in the Boost VC accelerator program in California’s Bay Area, they eventually set up shop in Saskatoon, with a satellite office in Toronto for sales and marketing staff. The company employs 80 people, and Mr. Boesch said he hopes to increase that to 120 by the end of 2019 with help from the new round of funding.

Napier Park’s partners said they have been fascinated with the restaurant market since 2014, estimating they have talked to as many as 50 startups in the food service industry; the firm co-led a $16.3-million financing round in 2017 for Toronto point-of-sale (POS) software company TouchBistro Inc. Much of 7shifts’ growth has come from integrating its software with that of POS firms such as TouchBistro and Montreal’s Lightspeed POS Inc. It was TouchBistro that helped connect the private-equity firm with 7shifts.

“We’ve spent a lot of time talking to restaurant operators, and have heard at length the challenges it takes just to run a restaurant,” said Ned May, a managing director of Napier Park. “For us, it was very clear that around scheduling and workforce management, 7shifts has the preeminent solution.” He said he can envision 7shifts eventually expanding its services to build similar solutions for issues with hiring, payroll and engagement.

Encouraged by regional successes such as Winnipeg-based food-delivery service SkipTheDishes, which Britain’s Just Eat PLC acquired in 2016, Mr. Boesch said he believes the Prairies can be a hotbed for Canadian startups: “Because we have such a hard-working mentality in the Prairies, the aggression and ability to learn here outweighs a lot of larger areas where people take startups for granted.”