By Jessica Galang Canadian Startup News September 19, 2017
CareGuide taps into Silicon Valley Bank as it eyes more acquisitions
CareGuide is known for its unorthodox approach to growth.
After raising its seed funding from over 70 institutional investors like Michael Litt and Ryan Holmes — and getting a rare $1 million debt facility from RBC — CareGuide used the funding to grow through the acquisition of competitors. The company also spun off its payroll service into HeartPayroll last year; the service now processes $3 million a month, according to CED John Philip Green.
CareGuide has hit $5 million ARR, with a 596 percent revenue increase over fiscal 2016.
As the company celebrates 596 percent revenue growth over its 2016 fiscal year — and a $5 million ARR milestone — it's continuing to get attention from some big names. Silicon Valley Bank has joined an impressive list of actors helping CareGuide to grow, having recently provided venture debt to the caregiver platform.
"I probably first met John three years ago and really liked the story. It was a combination of a good growth story, with a CEO that we really like a lot, and then the Canadian market — specifically the GTA — is incredibly important to us," said SVB managing director Win Bear.
As the Canadian entrepreneurial landscape gets more hype, there have been rumblings about the bank's increasing activity in the country. The Globe and Mail reported that the bank filed an application in July to establish a lending branch in Toronto, and Bear says that the hope is to have a team on the ground by 2018.
Bear wouldn't disclose the specific number of Canadian companies they're involved with, but named D2L, FreshBooks, and Hootsuite as clients in its roster.
CareGuide VP of marketing Alyssa Atkins was key to spinning out HeartPayroll, which now processes $3 million monthly.
"We've had client companies in Canada probably for 13 years or so, and for a long time, that was probably probably more of a reactive effort," said Bear. "You're seeing more of the belief that great Canadian tech companies don't necessarily have to pick up, pack up and leave and go to the Valley or elsewhere to see if they can grow world-class, multi-billion dollar companies right here in Canada."
CareGuide has already paid back half of its million dollar loan from RBC, and refinanced through SVB. For Green, the injection of extra cash — which he wouldn't disclose, indicating only that the amount was a lot larger than its RBC financing — means continuing their mission to grow through acquisitions.
John Philip Green said the SVB cash injection – a lot larger than its previous RBC financing – will be used to fuel growth through more acquisitions.
Asked why acquisitions were his preferred growth focus, Green pointed to the CanadianNanny acquisition, a 13-year-old company with a strong brand and team behind it.
"We're looking for examples of companies that fit together with us like that," said Green. "We also have a history of buying domain names, so you'll find 10 tier one domain names with the company. And these are expensive pieces of real estate. So we're working on getting more of those."
The team has doubled in the last year from 16 to 30 employees, and Green plans to invest in more engineers, research and development, and sales and marketing staff. "We've built up a product team over the last nine months or so," said Green. "We never had a product team before, so that's a big transition inside of our company. We're not just good at growth and marketing, we're also good at product as well."
As the company continues its scale, Green says that he's come to understand his role to be three key things: articulating the vision for the company, communicating it to stakeholders, and making sure the company has money in the bank. "I really just focus on getting the best people, keeping them happy, making sure they get along — and let them do the work that would've been better than what I would've done anyway."
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Jessica Galang
Freelance tech writer. Former BetaKit News Editor.
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