Agendrix provides workforce management software to retailers, restaurants, nursing homes, and similar companies. The web and mobile-based software manages scheduling and team communication; its pro version also tracks time, manages timesheets, and exports to payroll. Sébastien Charland, CMA, CFO, and partner, sat down with Nathan Latka in January 2022 to discuss the company’s growth and plans.
- Five partners, including Charland, recently bought out a retiring partner who owned 50 percent of the company.
- ARR is up 70 percent YOY
- The company, officially launched in 2015, currently has 35 employees, including 14 engineers.
How the Company Shut Down a $500K Agency to Become SaaS
Several of Charland’s friends originally founded a successful agency company that generated $500K in annual revenue in its first year. After that first year, the friends shut that company down and moved its five employees to the SaaS, which they named Agendrix. Charland then quit his day job in finance and corporate risk management in Montreal to become a partner in the company.
How the Partners Raised $4.2m to Buy Out Founder André Gauthier
André Gauthier, a founder of the company, wanted to retire, and Charland and four other partners wanted to buy out his company’s share. To do so, they received equity and mezzanine debt funding from BDC Capital and Desjardins Capital. The deal, which is $2.1 million debt and $2.1 million equity, requires Agendrix to pay interest-only for five years, with refinancing required at the end of that period. The deal provides BDC Capital and Desjardins Capital with a minority stake in the Sherbrooke, Quebec-based company.
How the Companies Five Partners Help It Succeed
The five partners are childhood and university friends and now include Mathieu Allaire, Charles Valliers, Samuel Roy, Adam Tetreault, and Charland. Charland has an MBA from the University of Sherbrooke and quickly learned the software business after leaving his day job. Adam graduated with a BBA from the University of Sherbrooke and held previous marketing and product development roles at other companies before joining Agendrix. Mathieu, a co-founder with Andre, received a bachelor’s in computer science from the University of Sherbrooke and also attended École d’Entrepreneurship de Beauce. Samuel, also a co-founder, received a BAA from the University of Sherbrooke and previously held business and product management jobs. Charles, a co-founder, earned a bachelor’s of science in computer science at the University of Sherbrooke.
How Agendrix Has Grown To 4,150 Customers and $4.6m in ARR
Agendrix software is known for its user-friendliness and excellent customer service. It offers a 14-day free trial and no upfront costs or termination fees. The company provides free training and support seven days a week. Currently, the company’s primary sales focus is in the French-speaking countries of Europe (Belgium, France, Switzerland) and in Quebec because these markets are less crowded in the workforce management software space than English-speaking markets. They also have specific and similar labor laws that the software addresses.
The company’s first customers were primarily restaurants, Charland says. The company decided a few years ago to begin to seek customers more actively in recession-proof businesses such as senior living facilities and pharmacies. These industries have subsequently grown, increasing the number of potential customers available. Agendrix also continues to expand its capabilities and is now moving in the human resource functions such as onboarding. The average customer pays a little more than $1,100 annually, bringing the company’s annual revenue to almost $4.6 million.
How Agendrix Successfully Increased Prices an Average of 26%
Agendrix customers had not seen a price increase during the company’s history until January 2022. Yet Agendrix’s costs, especially labor, had been rising. The company initially considered a 10 percent increase but realized that a small increase would require another increase soon after.
The company implemented the price increase based upon tiers, with an asymmetrical advantage for upgrading. Customers who subscribed to the basic plan would see an increase of 37 percent, but those who bought the Pro Plan would only see an increase of 18 percent. The result was that the company added revenue from upgrades as well as the price increase.
Agendrix also called its largest customers four months ahead of time and advertised the increase three months before it took effect. It also allowed customers to lock in the lower prices if they committed to an annual plan. The result was that the company had only a 2 percent churn because of the increase. It also earned $55K in new revenue in the first 17 days of January from the price increase. The company expects to gain more revenue when the annual contracts come up for renewal.
How the Company Spends $500 to $600 to Get a $1,100 Customer
Currently, the company spends about $500 to $600 to get a customer. Much of the spending is on Google AdWords and Bing; Agendrix spent $20K in January 2022 on those media. The reward, however, is that once Agendrix obtains a customer, they tend to keep them. Total revenue churn in 2021 was 9 percent. The company is undertaking research with former clients to discover why they dropped the software and plans to use this information to reduce the churn, Charland says. The company, however, doesn’t see its current churn rate as a problem.
How Agendrix Plans to Move NDR to 120% to 130%
The company’s current NDR is 102 percent, but the company expects to reach 120% to 130% this year, Charland says. He believes that the expansion to add new HR modules will entice customers to upgrade to higher revenue plans.
How the Company Has Raised $4,550,000
The most recent funding round in August 2021, in which BDC Capital and Desjardins Capital funded $4.2 million, is the company’s second funding round. The company previously raised $350,000 in June 2016. The 2016 round was raised based on a $360K ARR and a $3 million valuation. The company currently has no plans to seek further funding, Charland says, adding that he hopes the company will bootstrap forever. Watching the company grow its product offerings and pursue growth in ARR and NDR will be interesting. Also interesting will be whether Agendrix will remain a bootstrap company.
