Software company powers forward
RocketRez lands $15-M venture capital investment from New York-based firm
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RocketRez, the Steinbach-based software company that optimizes mid-market tourism attraction operations, has just landed a $15 million venture capital investment from New York-based Level Equity, at a time when many other tech companies are being forced to back off.
It’s the second such capital injection the company has experienced in the last two years and John Pendergrast, the founder and CEO of RocketRez, said it is an acknowledgement of the important headway RocketRez has made.
“The word is getting out,” he said. “We’re making more and more significant inroads as a brand which takes time especially as fragmented and fractured as this the tourism space is. Our competitors definitely know we’re there.”
RocketRez software — which clients pay a monthly fee to subscribe to — handles things like ticketing as well as integrating gift shop and food and beverage and other ancillary sales onto one platform.
Its customers are mid-sized tourism attraction like aquariums, safaris, wildlife centres and is branching into theme parks.
The company has already grown from 20 people in 2021 to 60 today, with about 35 at its Steinbach head office, and it’s looking to increase its staff by another 50 per cent before the end of the year.
“We believe in RocketRez’s vision and their high-growth potential as demonstrated by the marquee clients they’ve onboarded and retained during these challenging times,” said Charles Chen, partner at Level Equity. “Global tourist attractions have weathered the storm in part due to the innovative solutions provided by RocketRez. They understand that technology and data are what will power their vision for the ultimate guest experience.”
And it’s the data analysis side that Pendergrast is looking to advance with the latest investment.
“We’re investing heavily around building our data science side so that when our customer log into the system they will be able to see more ways to earn more revenue,” Pendergrast said. “Our focus is to double-down on the fact that this is the age of intelligence not just the age of data collection.”
According to the IAAPA (International Association of Amusement Parks and Attractions), it is a $219 billion US industry.
RocketRez is not trying to woo the likes of Disney and Paramount who already know how to handle their customer flows. It’s after the operations with between $2 million and $200 million in annual revenue and in that cohort Pendergrast said RocketRez has a great chance to become a dominant player.
There are about 150 companies that provide software services to the tourism attraction sector but many of those attractions are very small players.
But of those 150 software companies, RocketRez was the only one to get funding this year and many were out there pitching.
“This market is ours to lose,” Pendergrast said. “We have every opportunity to grow substantially.”
Since its first round of financing at the beginning of 2021 — $6.3 million from San Diego-based Blueprint Equity — the company has doubled in size in terms of number of clients, revenue and staff size.
That’s even more impressive considering that many tourism operations had to curtail the scope of their operations during the pandemic.
Mark Evans, the founder and CEO of Winnipeg’s Conquest Planning, was an angel investor in RocketRez’s earlier days (the company started out life as Flatland Software) and and had been a mentor to Pendergrast.
Conquest uses artificial intelligence, advanced analytics and Evans is well aware of the importance of data in allowing businesses to optimize their operations.
“John is a very strategic operator and he’s had what it takes to get the company through the toughest of times (during the pandemic),” Evans said. “This latest investment is going to take them to the next level.”
The market landscape sets up well for RocketRez. There are a lot of big legacy players with big legacy systems. But the operators know they need to be more nimble.
“Everything is moving to be more mobile, more data-centric and the operators want to be able to track everything people are doing,” said Evans.
RocketRez has just release a product called RocketPass that allows the operators to do just that.
It’s experience attracting this second round of venture capital could bode well for its short term future.
Pendergrast spoke to about 20 firms, 11 were interested and he received multiple term sheets — venture capital offers to invest.
“We were able to make own choice and especially given the market conditions we were extremely fortunate in that regard,” he said.
The company is hiring up more senior executives and is about to expand into Europe.
“RocketRez is in a really good spot,” Evans said. “Either its going to start taking a really big market share or one of the big legacy players is going to say they need to buy it.”
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.
Updated on Tuesday, January 31, 2023 1:34 PM CST: Fixes typo