Canopy Extends Funding Round To $42M
Rust Cohle was right: time is a flat circle.
We think we wake every morning to a brand new day, but no. Time is circular: we start in one point, we end up in the exact same place. I know this because every morning I rise, Canopy has announced more funding. It's total deja vu. I go to sleep at night thinking what will the future hold, but deep down I know: Canopy raising money. It's basically an extension of breakfast at this point, oatmeal, coffee, a side of Canopy funding, butter, 8oz of orange juice. It's become such commonplace for morning meals, Canopy funding has been added to the food pyramid as a basic principle of healthy eating. It's true. Look it up if you don't believe me. Everybody is bragging about keto diets, driving the world insane with carbohydrate do's and dont's - a healthier alternative already exists, slap a little raspberry jam on a Canopy funding announcement in the morning and you'll lose weight in no time. I've already shaved 10 pounds in two months, if Canopy founder Kurt Avarell keeps this up, he'll owe me a new belt, jeans, and child-size polo. Which he can probably afford for two main reasons:
I wear very cheap clothing.
What we thought was a $30 million funding round announced on March 27 has morphed into a $42 million extended funding round announced today. A couple of firms (Tenaya Capital, Nyca Partners) caught wind of Canopy's funding habits and said, "Yup. Sign me up for that." They join a list of firms (NEA, Wells Fargo Strategic Capital, Pelion Ventures, University Growth Fund, EPIC Ventures) that have already said, "Yup. Sign me up for that."
So, Canopy has raised more money. I interviewed Avarell about all of his recent shenanigans, though I couldn't muster up the courage to demand a new wardrobe. But he owes me. At least a new belt and jeans, I'm swimming inside my clothes right now. It's nuts. I'm living inside a safari tent, lost inside folds of soft cloth and harsh stitching.
We can address this later, though; for now, let's dive into Canopy's rise.
“One thing that was critical to us from the beginning was maintaining a culture where people feel challenged and excited when they wake up in the morning, they can come in and make a significant difference,” said Avarell.
In 2014, Canopy was started in Avarell's basement. When the team became four people, they moved to empty space in a doctor's office. Problem: the room was too big. Solution: the doctor laid down masking tape in one corner of the room, Avarell and his squadron rented out the taped square, and that's how Canopy began it's upward trajectory. From a taped square. Anything is possible, folks. I encourage every startup founder reading this to immediately lay down tape and only work from within the marked box, there's some sort of method to the madness that we can't comprehend right now. But work from a taped box and things will work out. That's the moral of this story. I can't stress it enough. Boxes of tape hold business powers that are near incomprehensible, don't knock it till you try it. Avarell taped his own box, put together a plan for a tax resolution software suite, and now look what's happened:
- A $2 million seed round in 2014.
- An $8 million Series A round in 2015.
- A $20 million Series B round in 2017.
- A $30 million round that went inside a taped box and came out as a $42 million round.
- A team of 250+ employees officed in Lehi, with boxes of tape big enough to fit anything their hearts desire.
- The release of tax resolution software that has serviced more than one million taxpayers, something Avarell says is just a "sliver of the technology we’re working on." The recent funding will go towards this product development, along with a boost for sales and marketing.
Glassdoor and Battery Ventures have also noted Canopy's rise. Their list of highest rated private cloud companies to work for placed Canopy at #3 overall, joining a gaggle of Utah companies (Health Catalyst, Lucid, Podium, HireVue, Pluralsight) in the top 50. Kurt Avarell has a 100% approval rating which is incredible and gives credence to my theory that taped boxes are life-changing: step inside and return to the world as an enlightened being.
“There was a sizable representation of Utah companies on that list, that is something we’re proud of as a company and we should be proud of as a state,” said Avarell. “The company will grow and the goal is to grow it here in Utah. Our growth will continue to accelerate into 300, 400, 500 people and beyond. Within the next two years, we expect to be 400+ people.”
Canopy tripled their customer base last year and according to Avarell, will do so again in 2018. Before long, their taped box will encompass the entire world and we’ll live in peace, harmony, resolving tax issues as simply as we breathe.
“We want to reduce friction that is in the tax process," said Avarell. "It’s a cumbersome process, not a lot of transparency, not a lot of automation behind it — our idea is to automate income tax from end-to-end...If Canopy can be a launching pad and play some part in the personal trajectory of the team members who are here, that’s a huge success. We’ll see people from Canopy go out and create other startups. Hopefully some will stay here for a long time, but others will leave and that’s normal. They’ll go do humanitarian work or run for political office. Hopefully Canopy is a launching pad and plays some role (however minor) for everybody who works here. That’s the legacy we’re trying to build — an enduring company solving real pain points in the market, with a world-class team doing great things both inside the company and outside.”