When Adrian Schauer started his latest business, Alaya Care Inc., in 2014 his goal was to grow the software provider for home health-care agencies and then flip it to make some cash.
Since then, 40-year-old Mr. Schauer has changed his mind. After seeing Canadian software startups Shopify Inc. and Lightspeed POS Inc. stay Canadian while achieving multibillion-dollar valuations, he wants Montreal-based Alaya Care to replicate that success.
Alaya Care is set to announce on Tuesday that iNovia Capital, the Caisse de dépôt et placement du Québec and provincially owned Investissement Québec have invested $51-million, buying $33-million in new equity from the startup plus $18-million of stock from early investors.
The company’s platform, AlayaCare, handles myriad tasks related to sending workers to visit aging and disabled patients in their homes including electronic referral intake, assessments, scheduling, dispatching, records retrieval, billing and payroll. Mobile workers and nurses get real-time access to information needed for their rounds on their mobile devices.
Alaya Care has 250 customers split roughly evenly between Canada, the United States and Australia. Those home health-care organizations use its software to support 500,000 monthly visits. The 200-person company generates $10-million-plus in annualized revenues and competes against another venture-backed cloud software company, San Francisco-based ClearCare Inc.
Mr. Schauer sold his previous startup, mobile work force management software firm Vortex Connect, to RedPrairie Corp. (now part of JDA Software Group, Inc.) for an undisclosed eight-figure sum in 2012. Vortex had made initial inroads into the home-care sector but the buyer wasn’t interested in continuing to serve that market, he said. Mr. Schauer seized on the opportunity, believing that with an aging population and stretched health-care systems that a modern cloud-based software tool would help agencies facing high turnover rates improve operations and patient care, replacing dated desktop-anchored tools and manual processes.
Angela Brewer, chief executive of not-for-profit home health-care agency Acclaim Health based in Oakville, Ont., said AlayaCare has helped Acclaim schedule 8,000 home visits a week, an increase of 500 visits, using the same number of workers. This has translated into cost savings, better employee retention, fewer scheduling gaps and reduced overtime, she said. In addition, painstaking time-sheet verification that used to take two employees two days each to handle weekly now happens with one click. “It’s made us more efficient and effective,” she said.
Alaya Care’s trio of Quebec-based backers are part of an emerging class of Canadian investors willing to write big cheques to support later-stage growth domestic companies, competing with foreign financiers who dominate such deals and are less motivated to keep companies Canadian longer-term.
“The emergence of bold Canadian growth-stage funding has been transformational for companies like Lightspeed,” said that company’s CEO, Dax Dasilva. He took his company public this year after the Caisse bought out early investor Accel when the Silicon Valley venture capital firm pushed to sell it to a foreign buyer. “That allows us to build Canadian tech anchors that have strong ownership and headquarters in this country.”
iNovia led a $13.8-million venture financing of Alaya Care in 2018 and raised its first fund this year to back later-stage companies. “We think many [Canadian companies] have the potential to be global players,” general partner Dennis Kavelman said.