Just 14 months after announcing a massive $17 million series A last year, Montreal’s industrial automation darling Vention is at it again, announcing today an even bigger $38 million series B round. This round was led by Ontario’s Georgian Partners who invested in Vention for the first time and will add Emily Walsh to the company’s board, the first woman to be part of that group. All previous investors also re-upped this time around, including Bain Capital Ventures and WhiteStar Capital. One of the reasons they went with the investment from Georgian is because they are striving to become “a Canadian unicorn.”
The company would not disclose the exact impact this investment will have on its valuation, however CEO Etienne Lacroix did tell Montreal in Technology that he was “delighted” with the investment. Based in the St-Henri area, the firm is basically automating industrial automation, a $150 billion global market annually. They have radically changed the way companies design and order automation equipment for their operations. Traditional design-to-build workflows for custom equipment take anywhere from one to six months, depending on the project’s complexity. Vention’s modular components and easy-to-use cloud platform enable those same workflows to be completed in as little as three days, including programming, simulation and custom designs trough their very own design software which is so easy to use Lacroix claims “It’s a programming environment where my mom could do it.”
Lacroix and his team have now raised close $60 million in just over two years.
“We saw three groups of companies impacted by Covid in different ways. eCommerce and food delivery was one that benefited from the situation. There’s other companies that unfortunately their whole thesis has gone. Travel tech for example will obviously be difficult for the coming years. And there was a last group of companies, which I think Vention is part of. Yes, there’s a decline in revenue, but our customer relationship and the thesis of the business is not impacted at all. In fact, what we saw is top of funnel has been significantly improved. We got a lot of people now that used to work on complex engineering software in their factories, but now with everybody’s being locked out they have to use other tools in order to get through this time. So we’ve seen great client acquisition through that time.”
Sales are up at Vention year over year. However closures and slowdowns of factories and supply chains world wide have slowed Vention’s growth during the course of the pandemic so far. Now, as industrialized economies now begin to reopen the company is already seeing business pick back up. Lacroix expects this will only accelerate as more and more businesses and manufacturers look to cut costs through automation, and Vention’s automation is the most cost effective around. In fact, after just a couple of years in business, they are already supplying companies like Google Facebook, Amazon, Lockheed and Tesla. They are now in more than 1,000 factories on 3 continents. They have even made a slight pivot to help combat the Coronavirus, with their equipment now being used not only to make ventilators, but in some case actually part of the ventilators themselves.
“We’ll be back at full power by the end of the year” said Lacroix, who plans to lead his company for some time to come. He points out that industrial automation is a very fractured industry. The two biggest players, Siemens and Rockwell Automation, both only have about 5% of global market share. “So there’s still 90% of the market remaining, and they’re the two biggest, so everything else is significantly fragmented. So, I tend to joke around with my exec team and tell them ‘guys in a market that large, where we can already address a third of it. If we just become a unicorn, it’s a little bit of a failure on us.’ Because in this industry, all of those incumbent players do a billion plus dollars in revenue. Right? There’s no reason we’re not getting there at some point. So obviously I’m trying, I don’t want to be arrogant about this, but we’re, we’re lucky enough that structurally we are in an industry that is significant and that will create a lot of opportunities to build that Canadian success story here in Montreal.”
Since Montreal in technology last covered Vention it has continued to scale at a brisk pace. This is in part due to their creation of the Vention partner network. Participating partners (usually other equipment suppliers) use the entire Vention platform as a go to market. “So now we have robot manufacturers that bring their robots to our platform. We have conveyor manufacturers that now are using Vention as a way to get their product integrated into a complete automation system.” The partner network was quietly launched in early January, and they now have 30 partners which have ‘Ventionized” their own industrial components to supplement and complement some of the Lego parts that Vention was already providing.
Says Lacroix “now you can really scale up and start to have these groups of industrial automation manufacturers that are committed to creating a plug and play experience for the end user. Again, somebody who has a general technology background can design programs, simulate and commission this whole piece of technology by himself without needing a system integrator. So the partner network really kind of shifted Vention from a kind of extremely successful e-commerce play to want one of marketplace regime. And obviously that creates a much more valuable company as a result.”
Lastly, on entrepreneurship and his ride so far with Vention. “Once you’ve tasted entrepreneurship you will never go back and work for somebody else. It’s never fast enough, never enough growth, you’re never satisfied… until you look back at what you’ve achieved. There’s a lot on your shoulders as an entrepreneur. Celebrating this financing round is a great way for us to look back and celebrate as a team.