Jobber raises $100-million in General Atlantic-led deal, defying Canadian tech sector woes

Jobber has raised US$100-million in growth capital, a rare financing milestone for a Canadian technology company after a tough year for the sector.

The funding for the Edmonton company, which sells an online platform for small home-services providers to run their businesses, was led by U.S. private equity giant General Atlantic and backed by past investors Summit Partners, Version One Ventures and Tech Pioneers Fund. It’s an all-equity deal that more than doubles Jobber’s US$300-million to US$400-million valuation from its last financing in early 2021, when it raised US$60-million.

It’s the first nine-figure financing of 2023 for a Canadian tech company. There were 41 such deals in 2021, according to the Canadian Venture Capital and Private Equity Association. That fell to 19 last year as companies seeking funding encountered resistant financiers that wanted to invest at lower valuation levels and demanded tougher terms.

“This is a clean financing with no funny business. That’s something we’re proud of,” said Sam Pillar, chief executive officer of Jobber, officially known as OctopusApp Inc. “This is a pure, clean equity capital financing that goes to the balance sheet to drive growth.”

It’s a welcome reprieve from bleak news out of a retrenching technology sector. Unbridled hiring and expansion gave way to caution and cash preservation last year as growth moderated, interest rates rose and recessionary concerns mounted. Last year tech companies globally cut 160,000 people, according to job-loss tracking site layoffs.fyi. The tally for 2023 has already surpassed 90,000, including large-scale layoffs in Canada by Lightspeed Commerce Inc., Verticalscope Holdings Inc., Benevity Inc. and others.

By contrast, Jobber is one of several Canadian digital companies that have surpassed US$100-miillion in annual revenue while successfully navigating through the turmoil. That list of companies, which have continued to hire and expand, includes legal practice management software seller Themis Solutions Inc. (known as Clio); travel upgrade and loyalty management service provider Plusgrade Inc.; GeoComply Solutions Inc., which verifies identities of online gambling customers; and Prophix Software Inc., which sells financial planning software.

The sector’s challenges “really didn’t apply to us,” said Anna Sainsbury, CEO of Vancouver-based GeoComply, whose profitable company recently sold a minority stake to Norwest Venture Partners and Actos Sports Partners. “We’ve had a lot of growth. Last year was a good time for us.”

Jobber, with 573 employees, is one of many Canadian software companies that have found success selling online software to small and medium-sized businesses to manage their operations. That includes merchant-focused Shopify Inc., and Lightspeed, Clio for lawyers, Jane Software Inc. for medical practitioners and Hi Mama Inc. for daycares. Their offerings typically replace pen, paper, rudimentary spreadsheets or ancient desktop programs with time-saving platforms accessible by smartphones.

Jobber’s target market is an estimated five million small home-service business providers in the United States including painters, heating and ventilation repair people, plumbers, electricians and landscapers. It has more than 200,000 users and is the category leader, said General Atlantic managing director Aaron Goldman. “Jobber is increasingly developing a reputation as an easy-to-use product that is efficient and helps people do better in their business,” he said. “There’s tremendous opportunity ahead.”

The market has also proven to be resilient as “our customers are out there doing non-discretionary work,” Mr. Pillar said. “If your air conditioning, furnace or hot water heater breaks, you’ll hire somebody to deal with that whether we are in a pandemic or recession or not.”

Mr. Pillar founded Jobber in 2010 with chief technology officer Forrest Zeisler after the programmers struck up a conversation at an Edmonton coffee shop. Mr. Pillar wanted to develop software to help small businesses that lacked digital tools. Mr. Zeisler knew a painter who was looking for software to track clients, quotes and invoices. They built the product for the company and sold it to others. The software, which costs upward of $69 per company per month, provides such functions as job tracking, quoting, invoicing, lead management and payment processing.

Version One general partner Boris Wertz said Jobber grew accustomed to growing with little outside capital as it struggled for years to attract investors because of its remote location and market, which proved to be larger than expected. “They systematically marched forward with the capital they had and never grew too fast,” he said.