Sometimes, the brightest stars dim quickly. Five-year-old Diply, which produces Internet lint to distract millennials, took the top slot on Deloitte’s Fast 50 list last year. Deloitte said that it was among companies growing in a challenging labour market where there was not enough talent to go around.
Diply doesn’t have that problem anymore. It laid off staff in two rounds, one in July where it let 40 employees go, and another 35 layoffs in October. It’s a long way to fall for a company which in 2016 expanded from London, Ont. to open up offices in Toronto and New York.
Diply, which is heavily dependent on the fortunes and whims of social giant Facebook, is a good example of how fast growth doesn’t necessarily mean sustained success. It led us to wonder what had happened to the other companies that topped Deloitte’s Technology Fast 50 over the past few years?
2016 – UrtheCast
UrtheCast launched in 2013 with a mission to bring satellite images quickly and conveniently to commercial customers. When Deloitte put it at the top of the Fast 50 in 2016 it had grown 72,938 per cent between 2012 and 2015. The company began by putting two cameras on the International Space Station in 2013 before drawing up plans for its own satellite fleet. It announced plans for a constellation called OptiSAR in 2015 that would use synthetic aperture radar to provide earth images independent of weather or time of day. It also bought Deimos Imaging, along with its two satellites, in the same year. Deimos signed a $2.6 million contract with the Brazilian Defense Minister in May 2018 and another to provide earth images to the European Union in July.
In 2016, shortly before the Deloitte award, it announced plans for another group of satellites called UrtheDaily, which would provide daily full-earth imaging. In May 2018, it scored a $142 million in credit for the creation of a six-satellite UrtheDaily Constellation, subsequently signing a USD $25 million five-year contract to provide data from that system to an Indian operator, and another USD $30 million three-year contract with Moscow-based TerraTech.
Space operations are expensive, and UrtheCast has burned through cash in its lift-0ff phase. It filed a net loss of $31.7 million on revenues of $40.3 million in 2017, compared to a loss of $28.3 million on revenues of $111.3 million in 2016. Its interim first-half statement for 2018 shows an operating loss of $23.1 million on $7.6 million in revenues, compared to a $10.6 million loss on $21.3 million in revenues for 1H 2017.
Under new CEO Donald Osborne, who joined in June 2018, it acquired Geosys, which offers geo-analytics software for the agricultural sector. With a constantly increasing revenue backlog now above $300 million, Urthecast claims that it’s firing on all engines, but the markets aren’t convinced. Shares have dropped 87 per cent since their initial $1.79 in 2013 to $0.22 as of Oct. 31.
Its financial worries have been compounded by boardroom dramas. Activist investor William Holland of CI Financial sued the company in August after it appointed new directors. Holland was upset at the company’s board choices.
The company is still planning to launch OptiSAR but has pushed this out to 2023 at the earliest.
2015 – Frank and Oak
Direct-to-consumer clothing company Frank and Oak started out as a pure ecommerce play before expanding into the bricks and mortar business. Launched in 2012, the company had expanded to 16 retail locations in Canada as of February this year.
Since topping the Deloitte list, it has raised $16 million in Series C funding in February 2018, led by Caisse de dépôt et placement du Québec, bringing its total funding amount to $39.8 million.
Frank and Oak used this money to keep innovating in the cutthroat, competitive fashion retail market. It has begun using AI to create recommendations for its customers with a service called Style Plan, and has expanded from menswear into womens clothing and accessories.
2014 – Chango
Toronto-based Chango is a digital media company specializing in programmatic advertising. It slurped behavioural, contextual and browsing data on millions of internet users from dozens of sources, including private data marketplaces, while also accessing billions of real-time searches from Google, Yahoo, and Bing. It even looked at offline purchases. It would use this data to serve up the right ads to visitors on advertising networks to help drive them to its customers’ websites.
Chango’s revenue had grown 69,800 per cent in a five-year period, to reach $55 million in 2015. It could have headed down the IPO track, but digital advertising infrastructure company Rubicon Project made the company a $122 million offer it couldn’t refuse. Rubicon, which was on a buying spree at the time, acquired Chango along with its 150 employees to swallow the $35 billion in marketing spend which it said Chango controlled. Chango’s CEO Chris Sukornyk said that the deal bought Chango a larger base of publishing clients and supply partnerships.
2013 – QuickMobile
Established in 2006, QuickMobile rode the growth of mobile computing just as the smartphone era really began. Its mobile event app enabled conference and other event organizers to enhance the event experience for their audiences, with features like attendee feedback, live Q&A and gamification.
The company had grown 10,444 per cent by the time Deloitte gave it the number one spot in 2013. The next year, it ranked fifth with 12,332 per cent growth from 2009-2013, and then made the 21st-fastest growing slot in 2015, with a 421 per cent revenue increase since 2011. After switching CEOs in 2015 it expanded into Asia Pacific and boosted its presence in Europe with a partnership, teaming up with Event App Partner in Germany.
The company’s exit was eventually to be through merger and acquisition. Cvent Inc, which sells cloud-based event management software, snapped it up in May this year for an undisclosed amount, along with 100 employees.
So, five distinct high-growth companies over five years, with some distinctive outcomes. Some are visibly struggling, some took an early exit, and one continues to get solid backing from investors who clearly see potential.
