Assent Compliance Secures $20M in Drive to Accelerate Growth
Andrew Waitman didn’t really appreciate Assent Compliance at first. When he joined the Ottawa software firm as CEO two years ago, Assent employed just 25 people.
The company was run by boxing enthusiasts — a passion Waitman shared — and home to some razor-sharp programmers. It had been around since 2005. It was potentially interesting but, on the surface, underachieving.
But soon enough, Waitman saw something he liked about the firm, and he went to work.
Assent now employs 165. On Wednesday it will announce a $20 million equity investment from a group of venture capitalists, including Volition Capital of Boston and a fund run by Open Text of Waterloo.
The firm said it will use the new capital to expand operations and boost employment by roughly 100 over the next 18 months.
“You have to get into a company to understand what’s really there,” Waitman said. “They had bootstrapped this operation without the help of venture money and were selling their products to top corporations around the world,” he added. “They had accomplished something amazing.”
Assent makes a living doing that most Ottawa of things – verifying that the suppliers for multinationals are complying with ever-proliferating government regulations. Those regulations cover everything from product safety and labour laws to the use of chemicals and other materials that go into products.
Corporations potentially can lose multi-million contracts if just one piece of their supply chain is found to be in violation of local regulations or laws. So this is important business.
To accommodate expected growth, Assent has opened a new headquarters across from the St. Laurent Shopping Centre in the city’s east end. Dominating the main floor is an Olympic-size boxing ring.
It’s not just a symbol. The firm’s founding directors – Matt Whitteker and Rob Imbeault – have organized the Fight for the Cure charity boxing match. In 2012, the charity attracted worldwide attention with a bout that featured Liberal Leader Justin Trudeau and Senator Patrick Brazeau.
That was the same year Waitman took up the sport. He was 44. On his first day of training, Waitman was put through the paces by the manager of the gym at the time, Matt Whitteker. Coincidentally, Whitteker was also helping to train Trudeau and briefly put the two pugilists together in the ring.
“I didn’t recognize him at first,” Waitman said referring to Trudeau. “Here was this guy covered in tattoos with headgear on. He’d been boxing for years and I’d been doing it for 30 minutes. I was physically drained.”
In 2014, during one of his regular sparring matches with Whitteker, Waitman revealed he was leaving his job as CEO of Pythian, a data outsourcing specialist. “Come have a look at Assent,” Whitteker offered between jabs.
Pythian was Waitman’s first crack at running a high-tech firm. He had spent much of his early career as a venture capitalist – with Celtic House Venture Partners – where he learned to evaluate revenue potential in startups. During the 2008 global financial crisis, Waitman wanted to focus limited resources on North America. But his Celtic House partners favoured a more global outlook.
Waitman left the partnership in part to advise Pythian co-founder and owner Paul Vallée — a role that morphed into a job as full-time CEO. Vallée served as executive chairman until August 2014, when he took over as chief executive once more.
Waitman recalls that when he arrived at Pythian in 2008, the company employed about 50. By 2014, Pythian’s workforce topped 300 — and today employs more than 400.
What’s the secret? It helps to build on solid foundations. Pythian anticipated the trend that saw many corporations outsource the storage and analysis of data.
But Waitman insists there’s an equally important ingredient. “It’s a matter of building a leadership team,” he notes. With the right managers and executives in place, he said, tech firms can grow at impressive rates for extended periods.
Pythian’s revenues soared to $64.3 million last year from $12 million in 2010, according to estimates prepared by The Branham Group, an Ottawa consulting firm. This represents compound annual growth of 40 per cent, most of it done without the help of acquisitions.
It’s a delicate balancing act. Top executive talent requires significant upfront investment in salary and other incentives. During the past year, Waitman has bolstered Assent’s executive group significantly, including the hiring of Russell Frederick as chief financial officer (formerly with DragonWave) and Martin Sendyk as chief product officer (formerly Irdeto).
In part, this is why Assent is selling $20 million of its privately held shares — which still leaves the founding directors and other employees with majority control. But the cash will also be used to expand operations in Manhattan, Britain and to open another U.S. office. Assent claims to be selling its compliance software and services to more than 150 members of the corporate club known as the Standard & Poor’s 500 — comprising the largest public firms on Nasdaq and the New York Stock Exchange.
While this tells us little about whether these relationships are truly solid, it does hint at the possibilities here.
Waitman understands more than most how few tech firms can successfully manage the transition from upstart to giant. He’s got experience, energy and ambition. Assent just might last more than a few rounds.