After buying four companies in the past two years, Saskatoon-based Vendasta has secured $20 million CAD in equity Series E funding to continue its acquisition spree.
As part of this latest round, Vendasta has also converted a $52.5 million debenture into equity. Together, Vendasta said that these moves provide the 15-year-old software startup with a clean capital structure and ammunition to pursue even more strategic acquisitions.
“We are setting the company up to be able to [go public] when it is at an appropriate scale … and the markets are again receptive to tech IPOs.”
– Eric Clark, Vendasta
This announcement comes shortly after BetaKit reported on layoffs at Vendasta as part of a push to reach profitability by the end of 2023.
Boulder, Colorado-based Foundry led Vendasta’s Series E financing, which also saw minor participation from some undisclosed existing shareholders. Foundry got to know Vendasta over the past year through its acquisition of two Foundry portfolio firms—Broadly and Yesware—becoming a Vendasta shareholder through these deals.
Foundry partner Brad Feld has joined Vendasta’s board as part of the round, which closed earlier this month and brings Vendasta’s total funding to approximately $185 million.
Founded in 2008, Vendasta sells digital tools to companies that cater to small-to-medium-sized businesses (SMBs). The company’s software helps channel partners market, sell, bill, fulfill, and deliver solutions to SMBs. Vendasta currently serves over 200,000 SMBs through its platform, has more than 750 employees, and claims a revenue run rate north of $100 million.
Vendasta chief corporate development officer Eric Clark declined to disclose Vendasta’s latest valuation to BetaKit but claimed the Series E funding was an up-round at “a substantial premium” compared to the company’s previous rounds.
Back in 2021, Vendasta filed to go public on the Toronto Stock Exchange but put that idea on hold and instead closed $119.5 million in Series D funding in May of that year. This included that $52.5 million debenture, from Luxor Capital and the Canadian Business Growth Fund, which has now been converted into equity.
RELATED: Saskatoon software startups Vendasta, 7shifts, Andgo Systems make layoffs
Since then, Vendasta has acquired a slew of companies, including Foundry-backed Broadly and Yesware, as well as Matchcraft and CalendarHero.
“We believe they have built the most compelling platform in the market for selling and delivering B2B software to SMBs,” Feld said in a statement. “Today, there are thousands of B2B SaaS companies whose growth has slowed while they are sub-scale. We believe Vendasta is a natural consolidator of these companies.”
Clark noted that Vendasta has already assembled “a robust set of owned sales, marketing and advertising softwares,” adding, “We plan to continue building out our software suite until we can provide everything that a business needs to operate.”
According to Clark, Vendasta’s acquisition strategy involves buying “things that either accelerate our existing product roadmap substantially or extend our reach into completely new software verticals,” adding that the company is particularly interested in products with a large number of SMB customers and that serve lots of channel partners.
RELATED: Vendasta acquires customer engagement platform Broadly
Last month, Vendasta told BetaKit that some of the firm’s recent staff cuts were related to Vendasta’s string of acquisitions over the past couple of years, but declined to disclose how many employees or what percentage of its team were impacted by them.
Speaking to how current economic conditions informed these layoffs, Vendasta co-founder and CMO Jeff Tomlin told BetaKit at the time that the firm’s focus has shifted from growth at all costs to profitable growth, noting that Vendasta hopes to maintain or exceed the rule of 40 going forward given how the market is now valuing tech companies.
According to Clark, an initial public offering (IPO) still remains part of the plan for Vendasta. “Vendasta is still on a path to go public, and we are setting the company up to be able to do that when it is at an appropriate scale (likely north of $200 million USD in revenue) and the markets are again receptive to tech IPOs,” he said.
Feature image courtesy Vendasta.
The post Vendasta closes $20-million Series E to fund acquisitions, converts existing debt into equity first appeared on BetaKit.
Originally published on BetaKit : Original article