Son of Quebec cookie king scores financing to expand ‘Facebook for factories’ platform globally

Alex Leclerc grew up expecting to spend his life working at the snack empire started by his great-great-grandfather. He ended up helping the family business in a different way.

While employed as an operations specialist for Quebec City-based cookie- and granola-bar maker Biscuits Leclerc Ltd. a decade ago, Mr. Leclerc saw the company struggle to pass knowledge about its machines and operations between factory workers on different shifts using paper instructions. That affected operations, quality and safety.

So in 2012, he and childhood friend Antoine Bisson started a company, Poka Inc., to bring modern mobile communications tools to Biscuits Leclerc’s eight factories to help employees train and troubleshoot.

What they built was like a Facebook for the factory: Instead of consulting paper manuals when there was a problem with a machine, workers could scan its QR code with an iPad and be taken to Poka’s social-media-type landing page. There they would find a feed of how-to videos and other helpful posts uploaded by fellow workers and managers.

The tool helped Biscuits Leclerc reduce training times by 75 per cent, and cut equipment downtime and shorten changeovers.

“I started seeing some pretty interesting things on my iPad and was impressed by what they were achieving,” said Mr. Leclerc’s father, Denis Leclerc, president of the 116-year-old cookie company.

But when the father offered to back the Poka founders’ seed financing in 2014, they turned him down. “For me it was super important – I wanted to prove that I could do something without my father’s money,” said Alex Leclerc, now 32.

Poka has thrived on its own terms, and is poised to take its next step forward with a major financing it is announcing Monday.

The company’s software, one of a rush of new digital tools helping to modernize the manufacturing world, is now used by more than 100,000 workers at more than 500 factories globally. Its customers include Mars Inc., Johnson & Johnson , Robert Bosch GmbH, Kraft Heinz Co. and Stanley Black and Decker Inc. Industrial software giant Aveva Group PLC and factory-equipment maker Tetra Pak Group offer Poka to their clients.

Poka has more than doubled its user base in the past year while its ranks have swelled by two-thirds, to 105 employees. Revenue, now around $15-million a year based on a fee-per-user model, is set to expand significantly just based on deployment plans of existing clients. Bosch plans to almost double the number of its 22 plants now using Poka.

Food giant Danone SA, after putting 21 of its 200 plants on the system, has been able to get away from relying on paper-based folders full of procedures, and improved training time and shop-floor communications for 4,000 employees. Another 25 of Danone’s 200 facilities are signed up for deployment so far.

“For us Poka is a real entry point in this shift in change management,” said Sebastien Boissier, digital manufacturing director for Danone’s specialized nutrition division. “They are able to stay agile, listen to the customers and the shop floor needs and where the pain points are.”

But there’s little doubt the family business connection has helped. On Monday, Poka is announcing it has raised US$25-million led by 40 North Ventures, the venture capital affiliate of U.S. building products giant Standard Industries and backed by McRock Capital of Toronto. Both say Mr. Leclerc’s family business experience is a big reason they invested.

“We love founders that come out of a domain, and what better thing than [an entrepreneur] trying to solve a problem in his family’s factory?” said Scott MacDonald, managing partner with McRock.

Ben Sampson, 40 North Ventures principal, added: “We like businesses where a founder has lived a problem or issue firsthand and really understands what they’re solving. Working with a forgiving, friendly customer in the early days … is a unique circumstance that was very helpful.”

Existing backers, including the venture capital arms of Bosch and French giant Schneider Electric SE, as well as Caisse de dépôt et placement du Québec, are also investing, bringing Poka’s total funds raised to date to US$45-million.

And, after being turned away the first time, Denis has subsequently invested millions of dollars in subsequent financings, with no hard feelings. He said he respects his son’s drive to prove himself – though he added with a grin that missing out on the first investment “financially for me was not the best deal on Earth.”

Growing up the son of a cookie magnate had its benefits. Alex never had to pay for cookies, and his dad came home from work smelling like baked confections.

Under Denis’s leadership the family company expanded globally and sales reached $700-million annually. The family also moved from Quebec to northern Pennsylvania, where Alex got his start in the family company as a continuous improvement specialist at a company factory, while earning a business degree at a local liberal arts college.

In early 2012, he sent a PowerPoint deck to Mr. Bisson, who was set to graduate with a software engineering degree from University of Waterloo in Ontario and work for Microsoft in Seattle.

Mr. Bisson recalled that his old friend was bothered by receiving daily operations reports on machine downtime at Biscuits Leclerc a day after they happened. “It annoyed him for two reasons,” Mr. Bisson said. “He had to learn a day later” about issues. Mr. Leclerc was also struck that there were typically old hands on staff who knew how to repair every machine, but that knowledge was difficult to capture and pass on.

Filling weekend and graveyard shifts was a challenge, and the average tenure of employees shrank, while machines got more sophisticated. The company needed new ways to capture and disseminate knowledge to ensure consistency and improve productivity throughout the operation. The challenges broadly reflected trends in the manufacturing world as factories increasingly adopted digital innovations.

Mr. Leclerc was accustomed to looking for quick how-to videos on YouTube when he needed to fix something around his house. Why, he wondered, wasn’t there something similar – an effective, engaging online tool, for factory workers, that took advantage of the proliferation of mobile devices and peoples’ comfort with social media?

“He asked me, ‘Do you think there’s a solution that could be done?’ ” Mr. Bisson recalled. Instead of joining Microsoft, he started Poka with his old friend. Mr. Leclerc said, “I knew we needed multiple customers, we’d need a big engineering team, so having it within Leclerc wouldn’t make sense.”

Denis, whose other son John also works at the family company, said he wondered if he should push Alex “to come back with us, or do I help him to live his dream?’ .... We mix sugar, flour, butter and bake. Software is a different type of thing.”

The father initially thought their idea was “a bit crazy” and warned the pair “it will be tough, a lot of people are trying to do that and not so many will succeed,” he recalled. “But I said, ‘If you feel you can do it, go for it and I’ll do anything I can to help you,’ and that’s what I did.”

Biscuits Leclerc served “as our beta lab,” Mr. Bisson said. “That was a key benefit. We had this top manufacturing company that would allow us to test our technology and our vision and helped us shape the business in its first iterations.”

By the summer of 2014, they were ready to take their software to market, and raised seed capital from Montreal’s Inovia Capital and Uncork Capital from Silicon Valley. More recently, Poka has added digital forms and checklist features to its platform to help factories go paperless.

With the new funding, Poka plans to expand sales and marketing efforts, after relying largely on word of mouth.

“They’ll have to up their marketing game,” Mr. MacDonald at McRock said. “They’re entering the big time. That’s what this financing is for. They have a strong sales team but they need to punch that out, get aggressive and go global.”

Mr. Boissier at Danone said Poka also needs to keep adding functionality to the product “to cover all elements of the production process in one application.”

Poka, he said, competes in a crowded field of connected worker platforms from the likes of Dozuki and Parsable of California and European-based Beekeeper AG and 4Mation Group BV. “That’s really the gap they have to close.”

And though Mr. Leclerc is no longer part of the family business – which competes with some of Poka’s other clients – his father Denis said he’s always welcome back. “There is room for [my children] in the family business,” he said. “It’s not only what I want them to do, but what they’d like to do.”

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