Vision Critical makeover continues as software company, now called Alida, raises $ 20 million from Round 13

Vision Critical Communications Inc. was one of Canada’s software stars in the early 2010s, before becoming mired in internal upheaval and slower growth.

But over the past two years, the company has recruited new leaders, changed its strategy, moved its headquarters from Vancouver to Toronto, and changed its name to Alida Inc.

Now, with revenues rising again, the rejuvenated company, which helps large companies garner customer feedback, has raised its first share capital since 2012. Alida will announce on Wednesday that Toronto’s Round 13 Capital has invested 20 million dollars in the company through its capital development fund.

“This is a fundamentally different company, with a world class team that has come to turn this business around,” said Round 13 managing partner Sanjiv Samant, whose company typically invests in companies that, according to him, could be sold or become public within three years. in an interview. “We believe this is a company and a management team that we want to be associated with… We are at the start of the transition, but headed in the right direction. “

A key question, however, is whether Alida can catch up in an area dominated by the giants Qualtrics International. Inc. and Medallia Inc., which offer clients a wider range of feedback collection offerings than Alida began introducing last year. “It’s not that [Alida] couldn’t be good at it, they just haven’t gotten there yet and time is running out, ”said Harley Manning, research director at market research firm Forrester in Cambridge, Mass.

Alida, established two decades ago, has built the core of its business by providing online software to corporate clients used to manage “information communities” – continuous surveys of customers to glean insightful information. business strategies. It has become a leader in the field, counting Toyota, Twitter and Canadian Tire among its 640 customers.

The company added a market research and consulting arm in the 2000s, when founder Andrew Reid handed over the management to his father, pollster Angus Reid. After a prolonged civil war at the board level over Angus Reid’s continued involvement and strategic decisions, several board members left, the company ceded its market research business and W Capital Partners and Georgian Partners bought out Mr. Reid and other shareholders in 2017.

But Vision Critical has struggled to recover, downsizing and suffering from slow to negative revenue growth. His fortunes began to change under Ross Wainwright, a Canadian director of software sales who replaced Scott Miller as CEO in late 2019, after stints at Japanese telecommunications giant Nippon Telegraph and Telephone Corp. and software giant SAP SE.

Mr. Wainwright recruited a new management team, changed the company name and led investments in product development and feature expansion, adding new capabilities to garner customer feedback through a range of new channels . Alida now offers 20 products, up from one in 2019. The company’s employee base has grown by more than a third to reach 440 people.

The The idea was to position Alida in a class of enterprise software known as voice of the customer, customer experience management, or customer feedback management.

Space providers typically collect information from a variety of channels, including customer relationship management tools, customer contact centers, point-of-sale systems, and social media. The giants are NYSE-listed Medallia, which is being privatized by Thoma Bravo for $ 6.4 billion, and Qualtrics, a Nasdaq-listed company with a market cap of $ 23 billion. Qualtrics recently agreed to buy analytics provider Clarabridge, which uses artificial intelligence tools to learn from text and speech, for $ 1.1 billion.

Mr. Wainwright’s efforts have started to bear fruit. Recurring revenue increased slightly last year and is now growing at a double-digit rate, amounting to around $ 70 million per year. The growth rate is expected to reach 20% next year, he said in an interview. The employee and customer churn rate – the rate at which both leave the company – has fallen sharply, reaching the lower-mid-teens. Alida generated 40% of its turnover thanks to new software in the third quarter, against 10% in the first.

“You have to give them credit for stepping out of the specialist category and entering this larger battlefield,” Manning said. But he added that Alida’s new offerings “are not yet very competitive”. “That doesn’t mean they couldn’t be, but it’s going to be difficult. It’s basically a race to find out who has the best AI and who can analyze unstructured data at scale. It’s expensive to do that… Unless someone pays hundreds of millions of dollars on them to invest in technology, it will be very difficult to be competitive.

Mr Wainwright dismissed these concerns, saying his rivals are relying “on the drug of mergers and acquisitions to drive growth,” while Alida has built its own products in-house in addition to its core community software. information, and offer better prices in a market that can support many competitors. “If customers are looking for a quick time to value and are looking to remove complexity, this is something Qualtrics and Medallia cannot provide. [multiple] acquisitions that they must assemble.

“We can compete very well,” he said.

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