It pays to be ready to pitch, as any experienced entrepreneur will tell you.
Ali Asaria, CEO of Waterloo Region- and Toronto-based Tulip Retail, is one such entrepreneur.
On Monday, his company, which makes mobile software for retailers, announced it had raised a US$40-million Series B investment round led by Kleiner Perkins Caufield & Byers, one of Silicon Valley’s top venture capital firms.
On Tuesday, Asaria told Communitech News of the unusual, but nonetheless successful, way the big round came about.
It went like this:
A couple of months ago, Kleiner Perkins sent an email to Tulip, looking for an update on the company – a well-worn tactic investors use to prospect for deals, but one that Asaria had instructed his team to turn away, given how often it happens.
“You get a lot of emails from investors who want to get an update on the company and it can kind of get overwhelming,” Asaria said.
But in this case, the Kleiner Perkins email arrived at the same time some Tulip employees were visiting California as participants in the Scale-Up Program run by Wilfrid Laurier University’s Lazaridis Institute.
Since part of the program involves pitching to venture capitalists, Tulip saw an opportunity.
“Kleiner Perkins reached out just to touch base with us; we had never spoken to anyone there,” Asaria said. “And we wrote back and said, ‘We can’t meet, but we happen to have some staff that would love to do a test pitch with you, just to practise learning to be an entrepreneur.
“So they actually went down to the Kleiner offices to do a mock pitch. I guess they got interested in the company from that.”
That interest, culminating in the Series B round announced Monday, adds Tulip’s name to a roster of Kleiner Perkins investees that includes Google, Amazon and Electronic Arts, among many others.
Asaria said the investment will help his team to execute on the ambitious, 20-year vision they hatched when he founded Tulip in 2013: “To build one of the world’s largest enterprise software companies.”
To get there will mean taking Tulip public, which Asaria hopes to do in about five years, and “this funding will allow us to do that.”
Tulip’s current team of 130 people (about 35 in Waterloo Region and the rest in Toronto) is likely to double over the next year, as it expands its customer base beyond the 25 countries it serves today.
While most of the e-commerce conversation has been dominated by the explosive growth in online shopping involving players like Amazon and Shopify, Tulip has been focused on the quiet but lucrative revolution unfolding in bricks-and-mortar retail. Its software gives store employees tools, which they access via tablets or phones, to help customers explore products more deeply, and have a better overall shopping experience.
“We work with really large enterprise retailers who are telling us that 90 per cent of retail happens inside their physical locations,” Asaria said, “but there’s no innovation there. All the innovation is focused on what happens online, so, there’s this massive, massive opportunity if retailers could figure out how to transform that experience in the same way that online has been transformed.
“No one’s figured out how to crack that, and the secret to Tulip is really that we’ve figured that out,” he said. “We’ve figured out how to meaningfully change the in-store experience for retailers.”
Experience is the operative word here, as stores work to turn themselves into something much more than buildings full of goods on shelves, Asaria said.
“The neat part of my job now is that I get to work with the world’s best retailers,” he said. “Every single large, brand-name, well-known retailer, we talk to them and learn about where they see their stores going. And one of the things we hear is that they’re trying to transform their physical locations to become centres of experience rather than just points of shopping.”
Stores are starting to call themselves “event centres” and “showrooms” and giving their employees titles like “guide” and “director of experience” instead of “sales associate,” Asaria said.
Sure, their goods might be available to buy online, but only in these transformed physical spaces will customers be able to really try them out and gain a full appreciation for the brands behind them.
All of this means “these retailers really have to up their game in terms of the quality of the staff they have inside those locations and the experience that those folks can drive,” he said.
An even greater opportunity lies beyond retail, “in a world where every worker will have a mobile tablet or phone in their hand as part of their job,” Asaria said. “I think Kleiner invested because they saw the size of our larger vision, and our larger vision is to empower every worker to have the best tools possible on their mobile devices.
“That’s our long-term vision, to transform all of enterprise software, to change the way it fundamentally works by realizing that workers need to access enterprise systems directly, and they want to have gorgeous experiences that reflect the quality of the consumer apps that are typically on mobile.
“We want to do to the enterprise what Apple did to the consumer world, which is to have these beautiful, really user-friendly experiences that are mobile-first.”
It’s a tall order, given that so many large companies’ back-end systems run on dated, legacy software that is anything but beautiful – but Asaria says Tulip is determined to climb that mountain.
“When I first started this company I sat with the original staff and we discussed our aspirations,” he said. “Part of the reason why we were able to attract and retain the best folks in technology and product and sales was because we told everyone, from the first day they started at this company, that we have this really long-term vision to build a $100-billion enterprise software company, and to go for the long run.
“We wanted to be something bigger than the traditional startup story, which is to raise some money and maybe get acquired a couple of years down the road, if you’re lucky. We wanted to be able to attract talent that was looking for something more transformative and long-term.”
Asaria himself was looking for the same things in his own career.
“What would I be able to dedicate the next years of my life to? Because life is short, and there are only so many things you can do in your life,” he said to himself.
“We figured if we could go for it, if we could shoot for the moon and build something really big, that that was something more exciting than anything else. But the challenge with that is, it means we’re just getting started.”
As Tulip doubles the size of its team over the next year, many of the new jobs will be in Waterloo Region, at its Kitchener development office. That’s due, in part, to the relatively high number of people with senior-level tech experience in Waterloo Region, Asaria said.
“We’re finally big enough to be able to hire some of the best in technology in Canada, and a lot of those folks have moved to Waterloo over the years,” he said. “I just don’t see a company like us being successful unless we’re able to tap into the talent pool in both (Waterloo Region and Toronto).”