Fiix Inc., a fast-growing Toronto technology firm looking to bring cloud-based software and artificial intelligence to maintenance departments, has raised US$40-million in a venture capital deal led by Georgian Partners.
The company, headed by former BlackBerry sales vice-president James Novak, is one of a growing class of startups bringing subscription-based software to blue-collar workers, which are starting to attract interest from venture capitalists as white-collar-oriented cloud software providers had previously done for years.
Last year, for example, ServiceTitan, a Glendale, Calif.-based software provider for service technicians, raised US$62-million led by Battery Ventures, while Georgian recently led a $45-million investment in TrackTik Software Inc., a Montreal-based provider of subscription software used by security guards. Other startups sell subscription software for recruiting blue-collar workers, managing businesses for contractors and managing facilities, construction sites and commercial cleaning operations, including Halifax-based Swept Technologies, Inc., financed by 500 Startups and Inovia Capital.
“Traditional blue-collar industries have been largely left behind from a technology adoption perspective,” said Mr. Novak. “Fiix is at the intersection of that. We’re taking modern consumer-software architecture … and applying it to industries that traditionally didn’t have access to those types of solutions. Owning the technician is critical. If the guy with grease under his fingernails, holding the wrench and fixing the machine isn’t using our software, he’s the prime target.”
Fiix, which has 120 employees, has been roughly doubling in size every year and is believed to have more than US$10-million in annual revenue. The company, originally called Maintenance Assistant, was co-founded by serial entrepreneur Marc Castel in 2008. Mr. Castel drew on his previous experience as a partner of a plastics manufacturing company, when he hired his son to write software that automated tasks in its maintenance department such as inventory management and work-order processing, resulting in sharply lower maintenance costs.
After the sale of the plastics company, Mr. Castel and his son started the forerunner to Fiix, rebuilding the software from scratch. The company gave away its software for several years, amassing close to 40,000 corporate users. Once they raised money from angel investors in 2012, the company began charging for online access to the product on a monthly basis. Mr. Novak joined as head of sales in 2014, when the firm had 10 employees, and succeeded Mr. Castel, now executive chairman, as CEO last July.
Fiix raised US$17.5-million in two venture rounds led by Austin, Tex.-based venture capital firm BuildGroup. It now has more than 2,500 paying corporate customers – typically in industries which rely on heavy equipment in the production process. They pay between US$35 and US$100 per month for each of the 21,500 individual users.
Mr. Novak said Fiix is taking customers from legacy software providers such as SAP, IBM and Infor but added that just 12 per cent of the target market is using software. About three-quarters of new customers “are coming off paper-and-pen or Excel,” he said. “A large portion of the market is just getting into software for the first time. We’re very deliberately doing the exact same thing as Salesforce.com” when it began offering cloud-based software for customer-relationship-management users in the early 2000s.
Now, Fiix is looking to mine its customers’ data and apply artificial intelligence to predict when the machines they monitor and repair require maintenance, reducing costs and downtime from breakdowns. Georgian partner Simon Chong, whose firm typically invests in software firms that use data analytics and AI, said “that AI piece is key” and said his firm’s “impact team” of veteran executives hired to help its portfolio firms will help Fiix build out that offering.
“They’re doing predictive maintenance really well. We’re going to amplify that even further … and build a great company with a great AI differentiator,” Mr. Chong said.