Investee Profile – Kijenga
Kevin Kindrachuk and Matt Ingrouille co-founded Kijenga in 2012 – an online app that helps both sides of the home improvement industry. “It’s like online dating for contractor and homeowner” says Kevin.
In 2015, they reached a point in their business where all signs pointed towards bringing on investors to help scale the company. They were first introduced to SCN through a local networking event and before they knew it, they were pitching their business to our group of angel investors. Fast forward nine months and they were successful in raising a first round of financing through SCN. We connected with the cofounders to get an inside look at their journey through SCN.
“We came to SCN looking for investment. We had built some traction with a new pay-as-you-go model for our contractors. Plus, we had just launched our marketplace where homeowners could buy deals from trusted pros on demand and online. We needed cash for further development and more than that, we needed marketing dollars to get us out in the community.” Kevin explains.
Since that successful first round, Kijenga has built a second business line based on their experience working with professional contractors. They recognized a general lack of marketing skills throughout the professional home contractor industry. Kevin noted “We set out to solve our clients’ biggest headaches with a creative combination of technology and dedicated marketing services, called Kijenga Membership, with an all-in-one marketing tool specific to home professionals”.
“Starting this second business line was a very smart decision– a game changer for our business. We’re in the process of working with our investors on a new round of funding allowing us to move fast with this new business stream which already has proven successful.”
Why did you decide to approach investors versus debt financing or other options?
We needed cash and mentorship to catapult us forward. It was the guidance and advice an investor could bring to the table that was exciting. We were looking for investors who could open doors and be a resource as we navigate through this journey.
To get our business off the ground, we invested our own money through savings and personal loans. I quit my full-time job and didn’t take any money out of the company from day one, pouring in as much sweat equity as we could. Although it was my passion, I appreciate that it’s been a huge sacrifice for my family, especially my wife.
By the Spring of 2015 we were confident in our model and what we had built. We believed it was time for outside help to take our business to the next level. With a problem to solve in a massive industry and an opportunity in front of you, sometimes that’s enough. It was for us.
When you decided to raise money, did you create a strategy? How did you decide on the amount to raise and how did you decide what you were willing to give up?
We went into the SCN pitch with an idea of the amount of money and what we were willing to give up, but that can change fast, and it did.
We really wanted to find investors that understood what we were doing and could bring something to the table in terms of their expertise. Mentorship was invaluable at this stage of our business and so that was going to play a factor in what we were willing to give up. Besides, you can only talk to your wife for so long about your business.
It is tough to put a value on a tech start-up with little track record. In addition, we were a young tech start-up in a province without a lot of expertise and history in software as a service (SAAS) companies. We had to rely on go-forward strategies and demonstrate future opportunities; show investors the problem we were solving, the plan, market, the opportunity, the numbers, and; we had to sell ourselves as the committed, passionate entrepreneurs we were. People invest in people and we were hoping investors would see that we eat, sleep and breathe Kijenga.
We knew raising capital could easily become a full-time job. We had to be careful not to get too immersed, as we still had to run our company. We did our research, went through a business plan competition and we knew we really needed to be prepared with our numbers. It’s a double edge sword, if you spend all your time planning and not implementing, you’re not going to get anywhere.
Did you have certain skills or expertise you were looking for in an investor?
Money is money, and who comes to the table with that money will most often determine the type of expertise you get. We were looking for cash and had a wish list of expertise. It’s great that we could achieve both here in our home province. We needed marketing, financial management and strategic planning expertise. Those with experience in starting a tech company or construction business would obviously be a great asset. Our lead investor linked us to others in their network and we ended up with a diverse group; and 4 of the 5 were SCN members. The process took about 8 to 10 months, and were fortunate to have active and engaged investors that really want to see us succeed.
What level of engagement do you look for in an investor (mentoring, directors, entrepreneur in residence, or silent)?
The investors decided on how engaged they wanted to become. A couple of investors wanted to be involved in the day-to-day operations, which was fantastic as they filled expertise gaps for us! We have investors who want to be on an as-needed basis and some investors took more of a back seat.
Everyone has a seat on the Board and we meet quarterly to discuss the three biggest hurdles our business is facing. This is our preferred governance structure and it works well for us. These investors are more than willing to help whenever and however they can. It could be a quick email, a text message, or a phone call. Getting their feedback and advice when we need it is incredibly valuable.
You were successful in raising money though SCN, can you share any insight for the SCN members from the perspective of an entrepreneur going through their process?
Raising money for your business can be grueling and you don’t know how grueling until you’re right in the middle of it. It’s a battle for your time – in trying to find capital to propel your business forward and trying to run your business.
Lots of people watch shows like Shark Tank and Dragons Den and they see Kevin O’Leary rip contestants apart. It’s entertaining to watch, but you wouldn’t want to be in that entrepreneur’s shoes. Pitching to SCN was completely different. Maybe it’s the friendly Saskatchewan people, but the SCN angels want to see you succeed, whether they invest or not. The entire process was filled with valuable feedback and finding investors at the end of it all, was the icing on the cake!
It was awesome how willing everyone was to help us prepare for success. We were provided with a business coach and went through an extensive program to perfect our pitch. We had an opportunity to run through a practice pitch with real investors making the actual pitch a breeze. Those helping us could poke holes in our presentation, ask questions and make us really think about our business.
Raising money through SCN was a huge turning point for us. If a company is looking for capital to take that leap with their business, SCN is a great choice, not only for investment but for relationships. With or without the investment, it got us to think about our business and we were able to meet a lot of amazing people along the way.
As they say, an entrepreneur is someone who jumps off a cliff and builds a plane on the way down. Allow others to help you build that plane!