Coconut Software: Behind The Deal With Information Venture Partners & ScaleUP Ventures

Saskatchewan-based Coconut Software announced on November 7, the close of a $4.2 million CAD Series A round, led by Toronto-based Information Venture Partners, with participation from Toronto firm ScaleUp Ventures. The Series A brings Coconut Software’s total funding to just under $5 million.

Coconut Software provides an enterprise-scale appointment scheduling platform for companies with broad-facing customer interactions like telecoms or retail stores. The hope is that allowing the customer to schedule appointments reduces frustration from waiting in line or on the phone.

Coconut Software’s CEO, Katherine Regnier, talks about what it was like working with the investors during the Series A.

“After meeting with ScaleUp and IVP, I knew we had that right team at the table to launch the next phase of Coconut Software. They are thoughtful communicators, sophisticated investors, and most of all understand what it is going to take to elevate Coconut to the next level.” said Regnier. ​“In addition, ScaleUp has been able to introduce Coconut to Leadership Council members that would have otherwise taken us years to connect with. This is the real value of investors and mentors.”

The CVCA also caught up with our members on the deal: Information Venture Partners and ScaleUP Ventures to determine the factors that led up to closing the series A.

SCALEUP VENTURES – COCONUT SOFTWARE DEAL

WHY DID YOUR FIRM CHOOSE TO INVEST IN THIS COMPANY AND THE MANAGEMENT TEAM?

• Katherine Regnier, the founder and CEO along with the management team has historically bootstrapped the business while driving growth. With that said, Katherine’s product vision drove ScaleUP’s participation and we are delighted about company’s prospects.
• ScaleUP Ventures‘ Leadership Council, comprised of Canada’s leading corporations and innovators, is a guiding voice through our due diligence process. High engagement and feedback from our Council members demonstrated the business need for Coconut Software within large enterprises.
• Scheduling is an overlooked function within large enterprises. Coconut Software’s flagship product results in reduced customer service costs and an increased customer experience through personalization. The platform provides actionable data and business intelligence resulting in improved store staffing and an improved way to measure employee productivity.

WHAT WILL THE INVESTED DOLLARS BE USED FOR?

• Expansion of Toronto office with Leadership hires in Sales, Marketing and Customer Success.
• Bolstering of technical team in Saskatoon, specifically recruiting AI talent to drive product feature development.

WHERE DID YOU HEAR ABOUT THE COMPANY/OPPORTUNITY?

• ScaleUP’s Senior Investment Analyst, Christian Grunt, heard Katherine speak at a TechToronto event in February 2017. She gave a strong impression with her experience in bootstrapping a company and participating in Neal Dempsey’s Accelerator, Neal’s Running Start.

WHAT IS YOUR ANTICIPATION ABOUT THIS SECTOR IN THE SHORT TERM AND LONG TERM?

• Short term, we believe enterprises will continue to look for cost efficiencies internally within customer support while striving to improve the customer experience through personalization.
• Long term, we suspect online retailers will continue to deliver a strong shopping experience through competitive pricing, quick delivery times and flexible returns. To compete, retailers will differentiate through personalized experiences.

IS THERE ANYTHING PARTICULARLY INTERESTING ABOUT THIS DEAL THAT YOU’D LIKE TO EMPHASIZE?

• The company was founded in Saskatoon! The management team has done a terrific job and is performing on par with our investments within Toronto and in the US. We look forward to engaging the Saskatoon technology community further.

WHAT IS YOUR EXIT HORIZON ON THIS DEAL?

• In efforts to remain conservative, we apply a five-year time horizon to all Series A stage companies. With that said, ScaleUP is committed to Coconut’s success for the long-term.

TELL US ABOUT THE EXPERIENCE/EXPERTISE OF THE INDIVIDUAL/LEAD AT YOUR FIRM INVOLVED IN THIS DEAL.

• Kevin Kimsa, previously was Managing Director of OMERS Ventures but built his career as an operator, founding and exiting three software companies including Solect Technology to Amdocs for $1.2B.
• Kevin’s experience in scaling software companies is highly relevant to Coconut Software because of the industry verticals the product is most relevant to.

Information Venture Partners – Coconut Software Deal

Why did your firm choose to invest in this company and the management team?

We were impressed by Katherine Regnier as a founder. She has vision, passion and excitement for what she is building. Coconut Software (Coconut) is changing the way enterprises are engaging with their customers and delivering service-first experiences.

What will the invested dollars be used for?

The funds invested will be used to fuel growth in both the Toronto and Saskatoon offices, hiring across several departments and to further expand its marketing efforts and overall presence.

Where did you hear about the company/​opportunity?

CEO and Founder Katherine Regnier was on a trip to Toronto from her native Saskatchewan, and a mutual advisor suggested we meet. When we met, we were excited by Katherine’s passion and the opportunity with Coconut. Fast forward to a year later when she was ready to raise her Series A round, Coconut demonstrated material progress. Since we had already stayed in touch and kept each other updated, we moved quickly and to make the decision to lead this current round of financing.

What is your anticipation about this sector in the short term and long term?

Enterprises are already driving to increase customer engagement due to a push from their customers for more personalized, seamless mobile experiences. The vast majority of customers expect the ability to book online, and we are already seeing enterprises (especially financial services organizations) adopt these capabilities in order to deliver these personalized and seamless experiences. In addition, there are numerous benefits for management teams and their staff, with appointment scheduling already driving improved workforce management and staff efficiency for Coconut’s customers. Appointment scheduling is only the start, and we think Coconut is well-positioned to release additional capabilities that drive benefits to both customers and internal teams!

Is there anything particularly interesting about this deal that you’d like to emphasize?

We have invested in Canada and the U.S. as a team over the years, but Coconut represents our first investment in Saskatchewan Coconut has assembled a reputable syndicate of investors with experience scaling enterprise software companies and helping grow sales in financial services, telecom, retail and other verticals.

What is your exit horizon on this deal?

Our philosophy is to invest and partner with Coconut over the long-term.

Tell us about the experience/​expertise of the individual/​lead at your firm involved in this deal.

Dave Unsworth will be joining the board along with Kevin Kimsa of ScaleUP Ventures and Neal Dempsey of Bay Partners. David co-founded Information Venture Partners in 2014 and has led investments in Sensibill, eSentire (exited), Igloo Software, Viigo (acquired by Blackberry), and works closely with portfolio companies like Flybits and Sensibill – both industry leaders in contextual commerce. Prior to Information Venture Partners, David had a successful career in operating roles focused on e‑commerce strategy development, technology enabled financial services product development, technology project management and retail/​commerce financial services. We and Katherine believe this experience will help Coconut as they continue to grow in the industry and become a leader in customer experience software.

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