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By Jessica Galang
May 6, 2021
On April 20, 2021, Waterloo-based Axonify, which provides training and communication for frontline workers, announced that U.S.-based equity firm Luminate Capital Partners would take a controlling stake in the company for US$250 million. The Globe and Mail reported that this puts its valuation around US$350 million.
Launched in 2011, Axonify provides mobile, personalized learning and communications solutions to workers in retail, grocery and healthcare, among others. Lessons are designed to be taken for a few minutes a day, which has 83% of users log in two to three times a week, according to Axonify.
“In the end, we didn't lose any customers, and we helped our customers stay connected to their employees in ways we couldn't have imagined.”
Past SAAS NORTH keynote speaker, Carol Leaman, CEO, tells SAAS NORTH that they discovered their product-market fit after working with a retailer dealing with two loss areas, including theft and accidents. “This organization got a new head of loss prevention, who said, ‘if I can just change their behavior, and the knowledge they have about these things, I can reduce this loss I'm responsible for,’” says Leaman. “We came up with this idea of making learning fast, fun and highly accessible, anywhere and anytime the associate had three minutes a day, and we rewarded them for learning. So they rolled it out to 20,000 people, and lo and behold, in the first year they saved $40 million.”
With the fresh funding, Axonify, which has 160 global enterprise customers, will fuel its next phase of growth. Before the funding was announced, we caught up with Leaman for her thoughts on her 10 years of growing Axonify, the metrics they watch closely and how fully knowing your customer can help startups find new opportunities.
Using third-party tools to capture business insights is important for tracking metrics at Axonify. To know what’s working, Leaman says the company conducts win-loss reviews: whenever it wins or loses a deal, they have a third party tool that connects with prospects, and it asks them specific questions about why they decided to go through with a deal or not.
“We get some really insightful answers to questions that we may not get if we just asked them directly,” says Leaman. “What that data has done is helped us price our product appropriately, build the right features and [help us] know the market values.”
From a marketing perspective, Axonify is also proactively using tools to find out what customers are searching for, and targets those searches. Their tools can allow them to see when target retailers are searching for certain terms related to the Axonify product.
There's more data than you could possibly actually ever really digest, but we do our best, and inside and outside the business we're constantly assessing what's going on.”
And, its in-house business operations team is solely focused on data collection and organization, helping the business stay informed about all things related to the business, the market and customers. It also has a market team to analyze the competitive landscape of the business.
This is especially important for Axonify, which has large retailers like Bloomingdale’s or Walmart as customers; with so many data points, they have to use many products to make sure they aren’t missing metrics.
“We use probably 20 different marketing software solutions to do all kinds of campaigns and tracking, and we use sales tools in every single area of our business,” says Leaman. “There's more data than you could possibly actually ever really digest, but we do our best, and inside and outside the business we're constantly assessing what's going on.”
Axonify’s success lies in finding the right verticals, and to do that, the company always looks at “a couple of use cases,” says Leaman. While the company found its strength in retail, in 2019, it expanded to manufacturing and grocery as other subsets of retail based on its ideal customer profile.
“Our ideal customer has some very specific characteristics: a large frontline workforce, hourly paid, widely geographically dispersed,” she says. “There are some specific industries with large employee populations that exhibit those characteristics. That's where we marry those ideal characteristics against the vertical markets, and look at where we might have a use case or two.”
Many key decisions happen at $1 million that need to be thought through on every level, says Leaman.
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This method of finding use cases served Axonify well during the pandemic. As retail employees were furloughed or working on reduced hours, Axonify’s communication platform ended up being valuable for organizations whose large employee base often doesn’t have emails for employees.
“All of the things that allowed them to stay connected to those employees, and not lose them, so that when they could bring them back to work, they could easily reach out to them. They had no way to do it other than Axonify,” says Leaman. “In the end, we didn't lose any customers, and we helped our customers stay connected to their employees in ways we couldn't have imagined.”
For startups hitting their first $1 million ARR with lofty goals to reach Axonify heights, Carol’s advice is to look at the past to predict the future.
“[Ask yourself], where do we think there's a sizable opportunity in either a vertical market that we've been able to capture there and what have we learned about the product?” says Leaman.
Many key decisions happen at $1 million that need to be thought through on every level, says Leaman. “The people, the structure of your organization, the markets you go after and what you're going to invest in marketing, what capital you might need to raise to get to $5 million. What are those pins you need to put in place to go from one to five?”