Photo courtesy of BridgitDiversity fuels growth as Bridgit raises seed round Anthony Reinhart April 21, 2016 Columns, Startups, View from the ‘Loo Photo: As co-founders of Bridgit, Mallorie Brodie (left) and Lauren Lake have baked diversity into the company culture. Whenever the subject of diversity in the tech industry is raised – and these days, that’s often – it’s typically approached from a fairness perspective. Often overlooked is the fact that diversity simply makes for better businesses. This fact is not lost on Mallorie Brodie and Lauren Lake, the co-founders of Bridgit, a Waterloo Region construction software startup that revealed Tuesday that it had raised US$1.7 million in seed investment. As female entrepreneurs from outside the region, without coding backgrounds, selling software into an old-school, male-dominated sector, maybe it’s no surprise that Brodie and Lake have baked diversity into Bridgit since the company launched in 2012. Still, it’s impressive – not to mention instructive – to hear Brodie explain the Bridgit approach to diversity, as she did when we connected over the phone Wednesday to talk about the seed round, the company’s growth plans, and why Silicon Valley expats should visit home more often, among other things. Here’s how our conversation went. Q – How did this seed round come about? What was the process, and how did you end up with the investors that you did? A – We had raised a small angel round previously, so one of our angel investors actually introduced us to Hyde Park Venture Partners, who led this round. They’re based in Chicago, but they had interest in investing in Canadian companies, so they’re up in Kitchener and Toronto pretty frequently. We met with them almost a year ago now, and in general, just got along with the partner and the principal that we were working with, which is extremely important if you’re going to have a partnership with them for many years to come. They had a lot of experience in SaaS [software as a service] companies, which is what we’re specifically focused on, and they’re also familiar with construction. So, from our perspective, it was going to be a great opportunity to work with someone who really understood our space. We went to meet with them in a casual way whenever we were in Chicago, or whenever they were here. And then ultimately, what happened was, throughout the fall we were gaining really strong sales traction, and they ended up giving us a term sheet just a couple days before the holidays. It was right at the very end of 2015. Then, at the same time, we were pitching at this event that the Creative Destruction Lab at Rotman was putting on. They had a conference and they brought in a lot of investors from around Canada and around the U.S., and that’s where we met Vanedge. Mallorie Brodie (left) and Lauren Lake (Photo courtesy of Bridgit) Again, they had a focus on a lot of SaaS companies that they’d invested in, and a number of their LPs were in the real estate development and construction space. So we felt that from that perspective, they would be able to help our team a lot, and they’ve already been extremely helpful in all of those areas. Then the rest of the deal just came together after the holidays. Q – What was your most important consideration going into the process of raising this round, and how did you make sure it was satisfied? A – We did have the privilege of working with a number of very well-known and very helpful angel investors at earlier stages, such as Joanne Wilson, who is a well-known investor in New York, and Dan Debow, a local investor in Toronto. So, we knew the calibre of people and the type of people that we worked really well with, and that’s something we weren’t willing to sacrifice in any way. We want to have true partners in the business, and that was something that was most critically important; just people we knew we could work together with in a really positive way. Ultimately that’s what will help grow Bridgit into an even larger company than the stage we’re at now. The other thing was experience. Construction is an extremely complicated industry; there are many stakeholders; many different types of construction; there are lots of different players in the space. Familiarity with the industry was going to be extremely helpful, to help us from a product strategy standpoint. And then, obviously, understanding how SaaS businesses work. They require a specific type of investment at specific times; you have to build a sales team internally, which is something that startups have to go through, switching the sales from the founders to a sales team in order to scale the business. This was something they had experience with, so those were extremely important items as well. But the number 1 consideration was finding people we were really excited to be working with, and who we thought would be a really good fit with the company overall. Q – What will the $1.7 million enable Bridgit to do? A – It’s really two things. One, we will be investing much more heavily in the product and engineering, and part of that is growing a team. As you know, we recently brought on Jeff Fedor as our CTO earlier this year, and so he’ll play a huge role in building that engineering team to ensure we can continually deliver a really positive product experience to all of our customers. The second thing will be growing our sales team and an overall emphasis on sales to the U.S. market. We have some initial traction there in New York, Seattle, Chicago and Miami, and we’re looking to grow more aggressively into the U.S. throughout this year. Q – Will that mean having boots on the ground in the U.S.? A – We won’t have boots on the ground. It’ll all be from our office here in Kitchener, but I imagine we’ll be at a lot of conferences and that sort of thing throughout the year. Q – What are your thoughts around future funding rounds? Would you just as soon avoid having to raise and try to grow organically, or do you foresee doing a Series A in the next couple of years? A – At this point we’re really focused on growing our revenue. That’s always been number 1 for our company, and I think that’s why we had success in putting this round together. Our investors were very impressed by the revenue traction we had. Having said that, in order to grow more aggressively, there’s definitely a possibility that we’ll be raising another round of financing in the future. So it’s not off the table at this point. Q – What did you learn during your time working with Communitech (and the Rev accelerator program specifically) that has helped you get to this point? A – I think one really important thing through our participation in the Rev program was this emphasis on revenue growth. We were really fortunate to be able to work alongside other companies that were at a similar stage to what we were at, building their sales teams and growing their revenue. And it was really helpful to be able to share experiences and strategies with those other teams. I think that enabled us to grow more rapidly throughout the time we were part of the Rev program. It’s easy to lose sight of what the goal is, because there’s so much excitement and buzz and everything around startups. But at the end of the day, we’re operating a business, and businesses need to make money. And so, it just really emphasized the importance of growing our revenue, which allowed us to put this round together, and be successful throughout this year as well. Q – Canadians working in Silicon Valley don’t seem entirely convinced they could find enough interesting and challenging work options for them back here in Waterloo Region, if they were to come home. What do you say to them? A – I’d ask if they’ve heard of Bridgit, if they’re looking for challenging work, first of all. Aside from that, I moved to Kitchener two years ago. Before that, I didn’t really have any roots in this city. And I’ve seen it develop an immense amount since I moved here, in terms of the number of companies that are starting to headquarter here that have a presence either in San Francisco or other places in the U.S. Google, Square, Shopify even, from Ottawa, for instance – are developing a presence here, which I think is creating very interesting opportunities for people who are used to working for some of the larger tech organizations in San Francisco. Then, we’ve also seen growth in terms of the number of startups that are here every year. I know [Communitech CEO] Iain Klugman mentioned recently that it’s over 500 startups that are created essentially every year in Kitchener-Waterloo. So, I think not only has there been a huge increase in the amount since I moved here a couple of years ago, but that’s only going to get better and better. I’d encourage them to come back for a visit to Kitchener, because what they were maybe a part of a few years ago is definitely not how it is now. It has not been static in any way, and it’s just getting more and more positive and exciting every single day, I think. (Photo courtesy of Bridgit) Q – The Forbes piece mentions you have been careful to ensure gender balance on the Bridgit team. Why is that important to you, and what, if anything, are you hoping other startup founders take from your example? A – I think there are a couple of interesting things to look at with the overall composition of our team. I’m not from Kitchener originally, and neither is my co-founder, Lauren. We moved here specifically to start the business. We weren’t University of Waterloo grads; we came from the University of Western Ontario. From Day 1, first of all, we were two female co-founders from out of town, from a different university than a lot of the companies had started from. So, from Day 1, we started off in a bit of a different way than a lot of the companies here. From there, it meant that we weren’t just looking at the local communities, or within our close circles and networks, to grow the company. If you look at our company, yes, it is 50-50 females and males, but we also have a lot of diversity in terms of how many universities people are coming from. We have over six universities represented from across Canada at our company. We’ve also moved 11 people to Kitchener to come and work at our company, and for a team of our size, that’s a huge percentage of the team. So, I think just because we weren’t from here, we didn’t have the local ties and connections here, we weren’t just looking here for talent. We went outside the region of Kitchener-Waterloo from the beginning, and that just happened without much thought. It was just sort of the natural thing to do for us. And I think now that we have built a very diverse foundation to our team, it’s obvious that we’re accessing a far larger portion of the talent pool, which means that we can recruit the very best people to work at Bridgit. I think it’s an extremely attractive company for everyone to work at, because everyone wants to be part of a company where there are many diverse ways of approaching problems, and diverse people to work with. We’ve had a ton of applicants who are coming from every different university; female, male, any background that you can possibly imagine, and I think that’s just because they’ve seen that’s such a core part of our company that’s emerged over the last couple of years. Q – How many people are on the team today? A – We’re at 17 people now, and growing Q – If you had to guess, where will you be on headcount by the end of the year? A – I think we’ll be doubling in size from where we are today. Q – How big do you think Bridgit can get? A – I think absolutely huge. Right now, we are focusing on a very specific communication workflow within the industry, within one group of stakeholders. The beautiful thing about the construction industry is that there are many different stakeholders, there are many different types of construction projects, there are many different phases of the construction project. So, there’s really endless opportunity for technology and for communication to be improved on the job site. We’re at the early stages right now, but there’s no end in sight for where we can grow the company within this industry. Q – Is it hard to not try and pursue all those different opportunities right away? A – Yes, it’s very hard. A lot of founders will tell you that focus is one of the most important but also one of the most difficult things, especially because we are constantly doing research with our customers, and we’re constantly speaking to so many different stakeholders within the industry. We kind of joke that I’m the one who ends up chasing people down on the street frequently, just to ask a couple of questions whenever I can. I think because of that, we’re constantly hearing about so many different areas of the industry that our solution could potentially help in the future. So, the really important thing for our team is, we take that information back, we talk about it and we acknowledge it, but at the end of the day, we have to be prioritizing our product roadmap in a very diligent and meaningful way that’s going to give us a really strong foundation to grow the company. Anthony Reinhart is Communitech’s Director of Editorial Strategy and senior staff writer. View from the ‘Loo looks at the issues, people and events that shape Waterloo Region’s technology sector.