$1.15M in Growth Financing Enables Versature to Scale and Accelerate Growth in Strategic Markets.
OTTAWA, ON, May 31, 2016 – Versature Corp., provider of cloud-based VoIP communication services for Canadian businesses, today announced it has secured $1.15 million in funding through agreements with the Royal Bank of Canada and BDC Capital.
“Versature has experienced 55% year over year growth and shows no signs of slowing down. By leveraging our existing financial relationship and solid track record with BDC Capital and RBC, we secured the funding we needed to continue to drive rapid growth, without having to give up equity,” says Paul Emond, CEO Versature. “With this funding, Versature will use our strong foundation of proven processes, SaaS technology, and customer traction to accelerate our growth in the Canadian market.”
Financing totalling $750,000 has been secured from BDC Capital through its Growth & Transition division in the form of subordinated debt financing. As a result of the BDC Capital financing, and the subordinated nature of the funding, RBC is providing $400,000 through its SaaS financing solution to Versature, which is scalable as Versature’s Monthly Recurring Revenue (MRR) grows.
BDC Capital’s financing was arranged by Mike Blattman, a director at BDC Capital Growth & Transition’s Ottawa office. Commenting on why BDC Capital decided to support Versature’s growth plans, Blattman says: “BDC provided a working capital loan to Versature in 2007 and the experience was nothing but positive. Versature is successfully disrupting the telecom industry with the cloud-based VoIP service it introduced in 2009, and revenues have been growing rapidly since. Its service is of outstanding quality, it has an exceptional customer retention rate, and CEO Paul Emond has assembled an experienced management team to lead the growth. The company is well placed to take advantage of the market’s evolution as VoIP business telephony starts to go mainstream.” BDC Capital’s debt financing is subordinated to RBC’s line of credit, which means repayments will be made to RBC first.
The deal leverages the strengths of RBC, BDC Capital, and Versature as a rapidly growing Canadian SaaS company. Versature will use the funds to expand its marketing and sales operations and target new strategic markets.
“Software-as-a-Service (SaaS) is rapidly becoming the dominant method of software procurement. Historically, SaaS companies have sourced the majority of their growth and working capital from equity investors but market dynamics have shifted. A growing number are now leveraging their recurring revenue streams by introducing bank debt solutions.” says Nick Albright, Technology Banker with the RBC Knowledge-Based Industries Group. “RBC is proud to support the growth of Versature with our SaaS financing solution. The company has a strong understanding of its SaaS metrics, a proven history of customer growth and satisfaction, plus the support of external investors such as our partners at BDC Capital”.
About Versature Corp.
Versature is the leader in Canadian SaaS-based business phone and communication solutions. Trusted by clients and partners across the country, Versature is an award winning company that is raising the bar with the highest quality phone systems, superior cloud-based technology, and Canadian-based support. Founded in 2003, Versature has a rapidly growing subscriber base and strong partner network from coast to coast. For more information, visit www.versature.com or follow us on Twitter @Versature.
Anastasia Valentine, Vice President Marketing
About BDC Capital
A subsidiary of Business Development Bank of Canada (BDC), BDC Capital offers a full spectrum of specialized financing and investment solutions to help Canadian entrepreneurs achieve their full growth potential. With more than $1.6 billion under management, BDC Capital takes a strategic, patient approach to nurture companies’ development over the long term. From venture capital to equity to growth and transition capital, our team of over 100 experienced, local professionals partner with entrepreneurs to identify and meet their needs on flexible terms. Some of the sectors in which we specialize include IT, industrial/clean/energy technology, and healthcare. For more information, please visit www.bdccapital.ca or follow us on Twitter at @BDC_Capital.
Royal Bank of Canada is Canada’s largest bank, and one of the largest banks in the world, based on market capitalization. We are one of North America’s leading diversified financial services companies, and provide personal and commercial banking, wealth management, insurance, investor services and capital markets products and services on a global basis. We have over 80,000 full- and part-time employees who serve more than 16 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 37 other countries. For more information, please visit rbc.com.