Rapid growth coupled with the development of a suite of products that have gained rapid market penetration – all spurred by a move to Waterloo Region in 2016 – have led to Delego Software, the maker of B2B integrated payment solutions, being acquired this week by Atlanta, Ga.-based EVO Payments, Inc.
Delego, based in Kitchener, was founded in London, Ont., in 1997 as a consulting business, but launched its current iteration at Communitech in 2016 following an investment round in 2013. The company has 35 employees, 21 of whom are based in Waterloo Region. It moved into 305 King St. W. in May of 2017 and continues to operate an office in London, as well.
“We were at an inflection point where in order to really maximize the potential of the company, we either needed to raise capital or look at becoming part of a larger organization,” Delego CEO and President Scott Johns told Communitech News, explaining the rationale behind the acquisition. “And so we explored both those routes and ultimately picked EVO. I think it's going to be great for our customers.”
Terms of the deal, announced Tuesday, were not disclosed.
Prior to the acquisition, EVO, which operates in 50 markets around the world, and Delego co-marketed their products through a strategic partnership.
“Delego brings us additional integrations and product capabilities, enhancing our B2B offering on a worldwide basis,” said Brendan Tansill, EVO’s President for the Americas. “We look forward to leveraging Delego’s secure cloud-based solutions as part of our B2B payments offering as this underpenetrated market continues to experience significant growth.”
Delego’s growth accelerated after the company moved into the Communitech Hub in the former Lang Tannery. Johns, formerly with Waterloo-based Sandvine, was well-acquainted with the advantages and opportunities, particularly with respect to talent, afforded by the Waterloo Region ecosystem, and once he joined the Delego team, made the decision to open a Kitchener office.
“To be clear, we still have our London office, and London still has some really key folks for us and it's an important office for us,” said Johns. “But, ultimately, if you're looking to grow a technology company, the availability of resources and skills [are] just broader [in Waterloo Region]. There's just a better feeder pool with the university ecosystem. So, we wanted to capitalize on that, for growth.
“The Tannery was an amazing recruiting tool,” he added, “because you can say, ‘Hey, come work in this amazing space.’ It certainly allowed us to recruit in a way that I don't think we would have been able to otherwise.”
He said that the company started at Communitech with “three or four people,” and that within a year had expanded to 13.
“And that's really where Communitech was a big help for us, in terms of allowing us to put put some put some roots down in K-W without having to go and rent 2,500 square feet for [what was] at that point [just a few] people.
“That's a tough barrier to overcome when you're entering a market and you're not sitting on $10 million in VC funding that you can deploy to hire 30 people in six months. So it was fantastic for us in that space.”
Delego’s software helps companies with their digital e-commerce and payment solutions.
“The [e-commerce] space is transforming, where people are realizing [that it’s] a strategic channel, and the payment experiences is part of that customer experience. And so being able to provide a streamlined, secure, efficient payment experience that doesn't create a barrier to the sale is incredibly important. And really, that's what we're helping our customers with.”
Johns said the acquisition opens up doors for growth and, without pointing to specific employee numbers, is confident that it will translate into “meaningful growth here in a number of different functional verticals.
“EVO is pretty excited about the team and the technology. There's a big opportunity there for our technology to be applicable for their merchants and help them with the business, as well.
“I think they also recognize we've grown the company with limited resources, so adding resources to our team is going to help accelerate the development of our product and our go-to-market as well.
“So very much this will be an investment story.”
And Waterloo Region, he said, is the place to make further growth happen.
“Growing a technology company in this community is a pretty interesting place to be right now. If you want to build a technology company, K-W is the spot to be.”