Softbank leads $80 million financing of 7shifts, buying Saskatoon’s booming tech scene
Global investment giant SoftBank Group is stepping into Saskatchewan’s teeming startup scene, leading an US$80 million venture capital financing of Saskatoon-based catering software provider 7shifts Employee Scheduling Software Inc.
The funding, led by the Japanese giant’s $40 billion Vision Fund 2, comes nine months after 7shifts raised $21.5 million in its latest venture capital deal. Previous investors Enlightened Hospital Investments and Ten Coves Capital also participated in the new funding.
This reflects 7shifts’ rapid growth: it increased the number of restaurants it serves by 59% last year, to 27,000 locations, mostly in the US, and more than doubled the number of employees on the platform at 650,000. Revenue, which is not disclosed, nearly doubled, chief executive Jordan Boesch said in an interview. 7shifts now has about 220 employees and plans to add 130 more this year, he said.
The funding makes 7shifts the latest in a series of fast-growing Canadian technology companies that have raised significant funding twice in one year from private equity providers. The company also joins two other Saskatoon software stars, Coconut Software Corp. and Vendasta Technologies Inc., to complete growth stage financings over the past year. Winnipeg’s SkipTheDishes was also founded in Saskatoon, better known — like Calgary, another emerging tech hub — for being home to some of Canada’s resource giants.
“Think what BlackBerry meant to Waterloo or Shopify to Ottawa – that’s what 7shifts is becoming in Saskatoon,” said Sean O’Connor, managing director of Conexus Credit Union’s venture capital arm. of Saskatchewan, a 7shifts investor. “We have some exciting subsequent growth ventures in Coconut and Vendasta, but the growth metrics from 7 teams in an industry that has been crushed by the pandemic has been truly sensational.”
It’s SoftBank’s third investment in Canada — a market it once avoided — after leading nine-figure financings from Clear Finance Technology Co. (Clearco) and Deep Genomics Inc. last year.
These three deals are “not enough,” Ram Trichur, a partner at SoftBank Investment Advisers, said in an interview. “Hopefully we will change that in the near future. I really hope that we will do a lot more transactions in the country. “Canada has started producing world-class companies at a very rapid pace.”
Mr Trichur said 7shifts was “high on the list” of companies SoftBank wanted to support in Canada because it serves a huge industry with “a product this industry needs”, boasts low churn – the rate at which customers drop out of the product – and a strong management team.
7shifts was co-founded in 2014 by Mr. Boesch – who comes from a family of restaurateurs – his wife, Andrée Carpentier, and Johannes Lindenbaum, who are the company’s top executives. Their idea was to improve the planning of restaurants and their staff by digitizing the process for easy access via mobile devices. The company uses artificial intelligence to predict staffing needs based on factors such as historical sales and weather, and has since expanded its offerings to include hiring, clocking, integrations with payroll services,… employee engagement and tip pooling.
The company laid off a quarter of its 160 employees at the start of the pandemic, but by fall 2020 sales had fully recovered and it rehired most of them. Business took off in the first half of 2021 as restaurateurs sought to better control their pandemic-hit businesses, shifting away from spreadsheets, pen and paper to more sophisticated digital tools, Boesch said. “There has definitely been a shift in our product from a want to a need.”
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