No stranger to Douglas Magazine is the highly successful, award-winning app design and development company, FreshWorks Studio. Headquartered in Victoria, and one of Douglas’s ‘10 to Watch’ in 2017, FreshWorks has flourished, becoming a Canadian tech superstar.
And now, thanks to an announcement in early July, FreshWorks has become even bigger, with its merger with EY Design Studio.
Founded in 2014 by Samarth Mod and Rohit Boolchandani, who both immigrated to Canada in 2012/13 to pursue an MBA at the University of Victoria, FreshWorks quickly turned into a national tech success story with countless accolades. They create highly functional digital solutions and have been helping government, the health care sector as well as enterprises of all sizes.
Back in 2017, FreshWorks had a dozen employees and before last week’s announcement, they were over 100 strong, with a diverse multicultural staff representing 22 countries, speaking 32 languages. With the merger they will be 50 per cent bigger.
EY wasn’t the first firm to approach FreshWorks. Others wanted to increase their footprint or expand their presence, but Sam says their interest was always transactional. It was all about revenue, pretty much just about the numbers. “That was not what we were interested in.”
Douglas caught up with Sam Mod for his perspectives on the development.
What was the genesis of the merger?
There were a few things. First, at FreshWorks, we have been developing quite a nice narrative. We have been working on some of the most impactful projects in the community over the last few years. We were at the forefront of the western Canada’s pandemic response.
(Indeed they were. FreshWorks was responsible for the design and build of apps like the BC Vaccine Card Verifier downloaded by over 440K users; the Alberta Critical Worker Benefit which delivered $465 million to Albertan care workers; and TELUS Health’s Espri Mental Health app which provides mental health support services to first responders and enterprises.)
We also rolled out the designs for vaccination registration. We were shipping products and digital responses quickly. We would know about a problem and potential solutions quickly so citizens would not face any issues. When a minister or the premier were about to announce changes, our team was there, working behind the scenes to make it all happen smoothly. So there was a nice story there, and, as a result, we were on the radar of larger organizations and firms.
What was different about EY?
When EY approached, we assumed the talks would just die in a few days. But their approach was very different. They came asking about our culture and our strategy and very far down the road, they asked about financials. So my reaction was that this was super interesting, given how much focus we put on our culture and how we want to protect that.
They said without cultural synergies between the two firms, it would be difficult for the acquisition and eventual merger to be successful. That was music to our ears.
At FreshWorks, we were working towards our vision of becoming a leading, international technology service company. We didn’t want to be a cog in the wheels. The EY Design Studio is new and we realized there was a strong cultural alignment. We realized we could really define what we want that partnership to look like. That is how it happened.
We get a chance to grow. We can define what we want the future to look like. That is the difference compared to other groups. We’re very happy to have found an organization so closely aligned with our culture, purpose and vision — putting people at the centre to deliver exceptional experiences for our clients, partners, and employees.
How long did it take?
This kind of merger doesn’t happen overnight. There was a lot of back and forth but all in, it took over six months.
What does FreshWorks hope to gain with the merger?
There are two aspects. EY Design Studio is very much focused on enterprises, private sector clients and they have a great presence and brand recognition in the United States. We believe with our expanded application development, engineering software development that we will be able to leverage that and provide more value to their clients.
They will do the same for ours. The synergies are so great that we will get 50 people doing things we don’t do, and they get 100 people doing things they don’t do. Together we will be able to give clients what they are looking for. We are stronger together.
The other part of it is our work with the public sector. EY works closely with governments like B.C. and Alberta and others across Canada but with the new capacity, and the strength in numbers, their 50 and our staff of 100, we can offer more to public sector clients across Canada. That is what we are looking for as well.
What are you particularly excited about for the future?
One of the elements is the potential for us to expand into different markets. Along with the continued focus on the government and public sector (GPS), EY has a big footprint in the financial services. They have Scotiabank, Goldman Sachs and there is a lot of opportunity with other clients such as Walmart, Mercedes, Nissan and FitBit, to name a few.
So there is that but there is an opportunity to grow where we have done super well, in the health space. It is difficult to get into that market. The processes, the quality control, the privacy and security implications are very serious and we bring those capabilities and experiences to the table. With the EY brand, with both of our portfolios, we will be able to look across the country and the U.S. There are lots of new opportunities.
How do you feel?
For a decision this monumental to make sense to us, we wanted to ensure we can look into the eyes of our team, clients, communities and supporters and say that it is a great decision for everyone. I truly believe that to be the case and will ensure our team and clients continue to get an amazing experience and value that were crucial to our success thus far.
Personally, it is like a graduation ceremony for entrepreneurs. Early on in 2014, we started with a big bang, we were excited and then once the reality set in, we had to unlearn things and learn new things. We had to get used to making thousands of mistakes and we absolutely did that and we still do so it is a journey. But EY is one of the Big Four and when they looked at our businesses, our matrix, our processes and how we organize ourselves, they were blown away and they wanted that secret sauce within EY.
That is one of the most exciting aspects about our graduation. We were just building something and doing our best, hiring good people. And then to have one of the Big Four come along like this? It was like a stamp of approval. So yes, we are treating this like a graduation ceremony for entrepreneurs. We participated in the final exams and we got our grades back and they stayed with us.