One of Toronto's hottest early-stage startups, Hubba, has attracted top-tier talent and big-time customers and boasts big-league ambitions. Now, it has raised its first major round of financing – and is already eyeing an even bigger raise within the next 18 months.
The four-year-old company, which aims to drastically simplify the process for retailers to replenish merchandise from brand-name manufacturers, is announcing on Thursday that it has raised $11-million in its "Series A" financing round, led by Canadian venture capital firms Real Ventures and Kensington Venture Fund.
Hubba's founders said the company will look to raise another significant financing round by spring of 2017, and eventually go public, but they added that their plans are to build a significant company, not sell out. "We're not going to be another $50-million takeout of a Canadian software company," chief operating officer Howard Lis said. "We're here to build a global dominant company. … This is not a quick flip. We have very big aspirations."
The Hubba story starts with some noteworthy principals.
Founder and chief executive officer Ben Zifkin previously built and sold a management consultancy and specialty system integration firm and was an early employee at former startup darling Workbrain, which was bought by Infor Global Solutions in 2007. (Mr. Zifkin's family is like the Kennedys of startups: Cousin and investor Jordan Banks is a senior executive with Facebook, while brother Aaron Zifkin is Canadian manager for Airbnb.)
Mr. Lis was an original partner at GMP Securities and has worked in tech for years, including building and selling his own renewable-energy firm. Chris Jordan, head of business development, led the enterprise specialty software group at BlackBerry Ltd. in its heyday.
"This is a top-notch management team," Real Ventures general partner Janet Bannister said.
The play is product information. As retail becomes more complex and spread across multiple channels, procurement and replenishment have become a complicated and time-consuming chore, with brand suppliers typically feeding information into multiple formats and systems, and often getting basic specs wrong.
Hubba aims to solve that by becoming "a single source of truth" for product information. Its offering is a standardized platform for suppliers and retailers to interact with each other and share all ranges of product information, from specs to marketing materials. Using the Hubba platform, suppliers populate a standardized platform with all relevant content, which is then easily pulled by retailers.
The company has designed the platform to be easy to use by marketing people, not high-tech professionals. "If you can use e-mail and Facebook, you can use our platform," Mr. Lis said. Added Mr. Zifkin: "We designed it for adoption."
The trick is to get major suppliers to adopt it – the first user is free, but as organizations pile on users, they begin to pay – then in turn compel retailers on the other side to ask the rest of their suppliers to join the platform, creating an ever-expanding network.
That, in particular, appealed to Ms. Bannister, who built online classified site Kijiji when she worked for eBay. "Buyers and sellers want to be where the others are," she said. "As it gets bigger, it's harder for others. It's like a big snowball."
Anheuser-Busch InBev SA and Unilever PLC are among those that have signed on, and after just 14 months in the market, Hubba now serves 10,000 brands and retailers. The company just started charging customers two months ago and is approaching seven figures in annualized revenues.
It's early days, but the company is aiming high, hoping to become the first dominant, and eventually only, player in this space. "There will be one player that owns it," Mr. Zifkin said. "It will be a huge opportunity."