Markus Frind became chief executive officer of Cymax Group Technologies Ltd. this week, and owns about 70 per cent of the company.Lucas Oleniuk/The Globe and Mail
Markus Frind has dabbled in a range of businesses since selling his profitable online-dating business Plenty of Fish Media Inc. to Match Group for US$575-million in 2015, including real estate, winemaking, steel production, soil-testing and financing startups.
Now, one of B.C.’s most successful tech entrepreneurs is back doing what made him one of the province’s wealthiest people: Leading a technology company. This week Mr. Frind became chief executive officer of Cymax Group Technologies Ltd., nine years after he first invested in the furniture e-commerce company and became a director. He now owns about 70 per cent of the company.
Cymax “lacks vision and direction, they’re just doing the same stuff over and over” and is roughly the same size as it was four years ago, he said in an interview. “There are a lot of things I want to get done. It’s really about changing the company and the culture and turning it back into a startup.”
Burnaby, B.C.-based Cymax operates an online marketplace for furniture and home furnishing vendors to sell and ship their wares through its websites and others including Amazon.com, Walmart.com and Houzz.com. It also operates an online freight logistics platform that matches sellers to shippers.
Cymax was founded in 2004 by Iranian immigrant Arash Fasihi, who began by selling TV stands online, then mimicked Wayfair, which didn’t ship to Canada at the time, by offering similar furniture categories for sale through its platform. Within three years, Cymax operated 170 sites, and sales reached $60-million in 2009.
But the company was hit hard when Google changed its search-site ranking algorithm in 2011, causing a 30-per-cent drop in traffic and revenue within five days. Cymax responded by raising outside capital, increasingly automating its business and slashing the size of its product catalogue.
Sales rebounded to $140-million in 2015, the year Mr. Frind, Business Development Bank of Canada and Salman Partners invested US$25-million, but fluctuated in the following years as Cymax tightened operations and mined sales, returns and listings data to look for ways to improve margins. It became profitable in 2018 and chief operating officer Rizwan Somji succeeded Mr. Fasihi as CEO in 2019 after Mr. Frind became majority owner.
Cymax revenue more than doubled in 2020 to about US$300-million as e-commerce sales took off when people sheltered at home during the pandemic. Cymax hired investment bankers that year to explore an initial public offering, which didn’t materialize.
While revenues for online furniture sellers rose in the first two years of the pandemic they have subsequently fallen by about 25 to 30 per cent from their peak, and Cymax revenues sagged to US$278-million last year as competitors from China began selling directly into North America, Mr. Frind said.
Meanwhile, Cymax staffed up to meet the heightened demand, which cut into margins, leaving it in the red at various points in the past year. Mr. Somji left in December and was replaced temporarily by chief operating officer Mike Herenberg as Cymax hired a search firm to find a full-time replacement.
A few weeks ago, Mr. Frind concluded he was the best choice. “I’m pretty much the only person who has all these skill sets and can get this stuff done that needs to get done and in a quick amount of time,” he said. “With Plenty of Fish I literally built every line of code, I built the servers. I know product, I know marketing, I know programming all inside out. So when I go into this I can go into every department and know exactly what they’re doing, what they shouldn’t be doing, how everyone can work together and be way more efficient than what they currently are. I can just see where the threads need tying.”
Mr. Frind said it would be easier to bring in impactful changes including adding generative artificial intelligence to the platform “when you’re able to control the whole process” rather than advising and occasionally helping out, as he had in the past. He said Cymax was “kind of stalled in time” including aging user interfaces that required a coding refresh. “I’m going in there and reinvigorating the product and the growth. When I look at the potential I think it should be five to 10 times its current size. There’s just so much opportunity everywhere and it’s just a matter of capitalizing on that.”
Mr. Frind’s other main business foray is also facing challenges: Like other Okanagan Valley winemakers, his Frind Estate Winery is facing a second year of meagre production because of a deep-freeze in January, which he estimated had destroyed 95 per cent of the region’s 2024 grape crop. While that could push many local winemakers out of business, he said it wouldn’t affect his long-term plan to expand his “hobby” operation, which now has about 400 acres of producing vineyards and another 900 acres of land in the region.
Sean Silcoff