Calgary startup Symend raises US$43-million, bringing hopes of tech revival to depressed oil patch

Our portfolio company Symend hires hundreds to Build What's Next

by Sean Silcoff, The Globe and Mail (February 2021)

Symend Inc., a Calgary startup that has become one of Canada’s most rapidly expanding technology enterprises serving big corporations, has raised an additional US$43-million in venture capital, just nine months after securing US$52-million from investors.

The financing was led by Inovia Capital, which also led last May’s round. Other investors include Ignition Partners, Impression Ventures, BDC Capital, Mistral Ventures, founder Markus Frind and Matthew Schiltz, a former chief executive of DocuSign Inc.

“We like to invest in and double down on companies we see as super-high growth [opportunities] and that are big winners, and Symend is definitely in that category,” Inovia managing partner Dennis Kavelman said.

Symend is one of several Calgary software companies, including Benevity Inc., Solium Capital Inc., RS Energy Group and Neo Financial Technologies Inc., that have attracted significant capital in the past two years, providing a bright counterpoint to Alberta’s bleak oil and gas industry.

The momentum picked up as the pandemic crushed oil prices, highlighting the need for economic diversification, said David Lod, the CEO of Veerum Inc., a Calgary startup that provides online software for operators of major industrial projects. “The excitement’s coming from a decade of hard work, and now you’re starting to see [highly valued technology] companies come out of Alberta,” he said. “These significant capital investments and raises are happening so quickly.”

Symend combines artificial intelligence and behavioural science to help billers in the telecommunications and banking sectors collect from delinquent customers in a more effective and empathetic way. Its clients, which include most Canadian and U.S. carriers plus at least one large Canadian bank, have used its online software to work with tens of millions of customers. The company doesn’t disclose revenues, but CEO and co-founder Hanif Joshaghani said they increased more than 100 per cent last year, as customers struggled to keep up with payments and call centres became strained.

“We have this once-in-a-lifetime opportunity to build a globally consequential company, in terms of valuation and impact on end consumers." --- Hanif Joshaghani, CEO Symend

“Some of our bigger companies needed more help than ever,” Mr. Joshaghani said. “We have this once-in-a-lifetime opportunity to build a globally consequential company, in terms of valuation and impact on end consumers. We wanted to make sure we had the balance sheet to really go after it with confidence and build a category creator and leader.”

He said the company is now focusing its efforts on winning over North American financial institutions as customers.

Symend has quintupled its work force to 250 employees in the past 13 months and plans to double that this year. “We definitely exceeded our growth [objectives]” from last May, chief marketing officer and co-founder Tiffany Kaminsky said. Among recent recruits are chief technology officer Corey Scobie, a Silicon Valley-based Canadian who has had senior engineering roles with Akamai Technologies and IBM. Former Salesforce senior vice-president PehKeong Teh has joined as chief product officer, while Matt LaHood, formerly an executive with Fair Isaac Corp., became Symend’s senior vice-president of behavioural science, data science and analytics.

Mr. Joshaghani, an investment banker-turned-entrepreneur, conceived of Symend as a passion project in 2016 after selling part of his previous startup. His family came to Canada after fleeing Iran and living in refugee camps, and Mr. Joshaghani saw people he grew up around struggle financially.

He wanted to improve the dismal experience of dealing with debt collectors, as billers often use a one-size-fits-all method that involves sending impersonal late-payment notices, then contracting outside collection agencies to hound people. Mr. Joshaghani thought it would be more effective to engage customers constructively, using technology.

With Symend’s software, billers can individually address tardy payers according to what the data show about their history and likelihood to pay. The automated program uses softer tactics such as friendly nudges, messages with smiley-face emoticons and non-threatening follow-ups, all based on what behavioural science suggests its algorithms should do.

That has generated “out-of-the-box return on investment,” said Mr. Kavelman, as billers using Symend save on call centre costs and improve both collections and customer retention. Mr. Schiltz said every Symend trial with prospective clients has led to a contract.

With reports from Jeffrey Jones