Avanti Software, one of Canada’s largest independent Payroll and Human Resources (HR) software companies, today announced that it has raised $25 million in equity and debt financing. The funding round, which represents the company’s first-ever venture financing, was led by Round13 Capital with participation from Scotiabank Technology & Innovation Banking and existing investors.
With this injection of capital, Avanti plans to expand its world class engineering and product teams to accelerate the development of its cloud platform, and complete the transformation of its on-premise software to a best-in-class HCM solution. The expanded team will enable Avanti to bring to market product enhancements and solutions tailored for Canadian business at a pace that matches the rapidly changing needs of workplaces and their employees.
Avanti was started in 1980 and acquired in September 2016 from the company’s retiring founders by co-CEO, Amin Lalani. Since the acquisition, Lalani and co-CEO David Owen Cord have charted a new strategic course for the company, initiating Avanti’s transformation and bootstrapping its growth in annual recurring revenue (ARR) by nearly 250% to more than $10 million in 2021. Avanti’s entirely Canada-based workforce has more than tripled to 110 employees since the acquisition and the company anticipates growing its team to 130 people by the end of 2022, and 180 within three years.
“While a lot of entrepreneurs are focused on building their own start-ups from the ground up, I’ve always been inspired by spotting and fulfilling the enormous potential that can be unlocked in established businesses such as Avanti,” said Amin Lalani, co-CEO of Avanti. “This growth capital will enable us to complete the final phase of our transformation, with all our clients using our cloud solution by the end of the year, up from 20% at acquisition. Looking beyond that, we will continue expanding our reach, working with more mid-size Canadian businesses that want to modernize their approach to payroll, HR and workforce management with a partner that intimately understands their market.”
Through its user-centric product development philosophy and people-first mindset, Avanti has attracted clients from across Canada in over twenty industries. It counts several pre-eminent Canadian brands – such as Home Hardware, Princess Auto, and Porter Airlines – among the companies using its comprehensive suite of employee management solutions. Boasting a 95% satisfaction rating, Avanti’s entire Client Care team is well versed in Canadian payroll and HR practices, and are either maintaining or working toward a CPA or CHRP designation.
The Avanti platform is a payroll, HR, and workforce management solution purpose built for the Canadian market. Built organically from the ground up, each module works seamlessly together and leverages a single database to provide superior reporting capabilities and enhanced control over mission-critical, employee data. The platform is designed to simplify the complexity that mid-size businesses face in growing their workforce, including the challenges of geographic dispersion, different worker types (e.g., salaried, contractor, part time, and students), and different pay practices (e.g., union agreements and different benefit plans). It also simplifies even the most complex legislative and union requirements.
“We’ve seen a significant shift in both the market and our client base as the appetite for modern, cloud-based solutions has grown. This reinforced our decision to go all in, on the cloud,” said David Owen Cord, co-CEO of Avanti. “Having served the Canadian market for over four decades, the timing could not be better to deliver a purpose built, cloud-based HCM solution that provides a higher standard for our clients. This foundational shift positions Avanti for long-term success and will enable us to better anticipate and address the needs of mid-market companies.”
Although common in other industries, the adoption of cloud-based technology for HR and payroll processes has lagged. According to a 2020 Canadian Payroll Association survey of 2,400 payroll professionals, almost half (47%) were still using on-premise payroll technology.
“Workplaces are experiencing a once-in-a-generation-sized change and the role of workforce management is being totally transformed. Avanti is a solid business with a very clear product-market fit and significant growth potential. There are many niche providers in this space that serve the small business market and several more established companies serving global enterprises. Avanti is focused on the underserved Canadian mid-market, which represents a tremendous opportunity as the company completes its transformation,” said Brahm Klar, General Partner at Round13, who will be joining the Avanti board of directors. “We also believe the best predictor of success is the quality of the team and, in our view, the Avanti team is best in class. They are smart and progressive and want to help build better workplaces. Through our investment, we can help them do that.”
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