Software firm Deputy cracks the billion-dollar valuation milestone to break Australia’s unicorn drought, after a prospective US customer invested $37 million.
Australian workforce management software maker Deputy has cracked the billion-dollar valuation milestone, with its first external investment in six years making it the first private technology “unicorn” company to emerge since the tech funding market soured in early 2022.
The more than doubling of its valuation since 2018, when it last raised capital, marks a major turnaround for the start-up. Deputy almost went bust during the COVID-19 lockdown era, when demand for its software, which helps shift workers communicate and organise their rosters, dropped dramatically.It highlights a financial windfall for company founder Ashik Ahmad, who was first exposed to the need for better organisation of shift workers as a 16-year-old immigrant from Bangladesh, when he was flipping burgers at Hungry Jack’s. He founded Deputy in 2008, alongside entrepreneur Steve Shelley who had spent years wrestling with inefficient ways of organising his staff at his former company Aerocare, which provided services to airline and freight companies such as cleaning and loading and offloading cargo. The new investment was made by US-based Express Employment Professionals, a global staffing and labour hire company. Deputy initially engaged Express as a potential customer, but the company liked its product so much it decided to buy a $37 million stake, at a valuation exceeding $1.1 billion.at $423 million. It means Deputy’s investors can revalue their stakes at the higher valuation, making it a win for local venture capital firms Square Peg and EVP, as well as US investors IVP and OpenView.the company has been profitable for more than 18 months and hadn’t been looking to raise capital when Express proposed a strategic investment. “I think there’s no better validation of a company’s mission and what we’re doing than having a customer who decides to invest in you,” Ms Martincevic said.There were no Australian unicorns – private companies worth more than $1 billion – crowned in 2023. Research from Cut Through Venture found only four of Australia’s 15 unicorns have publicly disclosed repriced primary or secondary rounds and revised valuations in 2023: Canva, Go1, Pet Circle and SafetyCulture. A consistent run of new local unicorns came to a halt in early 2022, when a widespread pullback in global venture capital investing started to show up in the Australian market., an illustration of how fast-growing start-ups were forced to adapt when investors replaced “growth at all costs” metrics with a sudden taste for financial prudence, and demands for sustainable profitable growth.during COVID-19, which forced Deputy to retrench a third of its workforce, the company decided in early 2022 not to try to raise any further cash, and to slow its growth and hiring. Twelve months later, Deputy brought in Ms Martincevic, the former chief commercial officer of US buy now, pay later start-up Affirm, to replace Mr Ahmed as CEO. Mr Ahmed joined the board of the 15-year-old company, alongside co-founder and chairman Mr Shelley.Deputy reported its first profit in the year ended June 30, 2023, recording a statutory profit of $8.5 million compared with a loss of $24.9 million the year earlier, while annual revenue topped $100 million.“We are scaling Deputy thoughtfully and responsibly,” Ms Martincevic said. “That is incredibly important to us. The fact that we haven’t needed to fundraise in six years, and the fact we’ve been profitable for the last 18 months, speaks to the real strength of our business.” Paul Bassat, co-founder of Square Peg Capital, said the investment from Express would provide Deputy with the firepower to continue to invest in the growth of the business. “Deputy has evolved into one of the most important Australian start-ups to have emerged in the last decade,” Mr Bassat said. Express Employment Professionals, which has more than 860 franchised locations across Australia, America, South Africa and New Zealand, will roll out Deputy’s technology across the organisation. Through the partnership, Deputy will add up to 500,000 new users, a 36 per cent increase in its current global user base. More than 1.4 million shift workers in sectors such as hospitality, healthcare, and retail rely on Deputy’s app to manage their rosters and shifts. Ms Martincevic said users check the app up to seven times a day. Deputy has launched new tools that businesses use to onboard hourly workers via a mobile app and conduct employee engagement surveys after their shift ends. The company also created a communication tool, similar to Slack, that allows shift workers and managers to share information easily. “We are focused on the impact that we can achieve in the shiftwork community, which remains an underserved community despite being the most substantial,” Ms Martincevic said.is a technology reporter with The Australian Financial Review, based in the Brisbane newsroom. She was previously the work & careers reporter.
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