Global investment giant SoftBank Group is buying into Saskatchewan’s teeming startup scene, leading an US$80-million venture capital financing of Saskatoon-based restaurant software vendor 7shifts Employee Scheduling Software Inc.
The funding, led by the Japanese giant’s US$40-billion Vision Fund 2, comes nine months after 7shifts raised US$21.5-million in its last venture capital deal. Previous investors Enlightened Hospital Investments and Ten Coves Capital also participated in the new financing.
That reflects 7shifts’s rapid growth: It increased the number of restaurants it serves last year by 59 per cent, to 27,000 locations primarily in the U.S., and more than doubled the number of employees on the platform to 650,000. Revenues, which aren’t disclosed, nearly doubled, chief executive officer Jordan Boesch said in an interview. 7shifts now has about 220 employees and plans to add 130 more this year, he said.
The funding makes 7shifts the latest in a string of fast-growing Canadian tech companies that have raised sizable financings twice within a year from flush private capital providers. The company also joins Saskatoon’s other two software stars, Coconut Software Corp. and Vendasta Technologies Inc., in completing growth-stage financings within the past year. Winnipeg’s SkipTheDishes was also founded in Saskatoon, best known – like Calgary, another emerging tech centre – as home to some of Canada’s resources giants.
“Think about what BlackBerry meant to Waterloo or Shopify to Ottawa – that’s what 7shifts is becoming in Saskatoon,” said Sean O’Connor, managing director of the venture capital arm of Saskatchewan’s Conexus Credit Union, a 7shifts investor. “We’ve got a few exciting later growth companies in Coconut and Vendasta, but the growth metrics coming out of 7shifts through an industry that was crushed by the pandemic has been truly sensational.”
Those three deals are “not enough,” Ram Trichur, a partner with SoftBank Investment Advisers, said in an interview. “Hopefully we’ll change that in the near future. I’m really hoping we do a lot more” deals in the country. “Canada has started to produce world-beating companies at a very fast rate.”
Mr. Trichur said 7shifts was “at the top of the list” of companies SoftBank wanted to back in Canada, as it serves a huge sector with “a product that this industry needs,” boasts low churn – the rate at which customers drop the product – and a strong management team.
7shifts was cofounded in 2014 by Mr. Boesch – who hails from a family of restaurateurs – his wife, Andrée Carpentier, and Johannes Lindenbaum, who are senior leaders with the company. Their idea was to improve scheduling for restaurants and their staff by digitizing the process for easy access through mobile devices. The company uses artificial intelligence to predict staffing needs based on factors such as historical sales and weather, and has since expanded its offerings to include hiring, time clocking, integrations with payroll services, staff engagement and tip pooling.
The company furloughed one-quarter of its 160 employees early in the pandemic, but by fall 2020, sales had fully recovered and it hired most of them back. Business took off in the first half of 2021 as restaurant operators looked to get more control of their pandemic-stricken businesses, turning away from spreadsheets and pen and paper to embrace more sophisticated digital tools, Mr. Boesch said. “There was definitely a change in our product going from being a want to a need.”
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