Photo Credit: Phil Froklage for Communitech
Written by Anthony Reinhart
The deal means more than just money for Dozr, which has spent the last several months ramping up sales in the Communitech Rev accelerator program.
Its new investor, FairVentures, is the innovation arm of Fairfax Financial Holdings Ltd., a global conglomerate with more than USD$36 billion in assets. In addition to investments in restaurants, retail, travel and other sectors, Fairfax has substantial insurance holdings, including the Federated Insurance Company of Canada, which has built an insurance product to protect Dozr clients who rent their heavy equipment to others.
Having insurance built into its transactions is a key differentiator for Dozr, whose competitors require equipment owners to have their own insurance, which is difficult to obtain when renting machines to third parties. This could give Dozr a distinct advantage as it uses the investment – and Fairfax’s international connections – to expand beyond Canada and into the American market.
“This will allow us to scale,” Dozr CEO Kevin Forestell – whose company has amassed 2,200 clients in Canada since last November – said in an interview with Communitech. “It’s going to help us grow into new regions quickly, specifically the U.S. market.”
The combined U.S.-Canada market for construction heavy-equipment rentals is USD$40 billion and expected to grow to $62 billion in the next five years, Forestell said. That doesn’t include rentals of agricultural machinery, which currently account for about 30 per cent of Dozr’s business.
In addition to announcing the Fairfax investment, Dozr has named Gord Tanner – a veteran Waterloo Region software developer with experience in building several startups – as its Chief Technology Officer. Tanner was most recently CTO at bitHound, another Communitech Rev company, which he co-founded.
The collaboration between Dozr and FairVentures can be traced back to February of this year.
Dozr moved into the Communitech Rev accelerator program that month, and a few months later, in late May, Forestell made a splash at the Rev Demo Day in Toronto, where he out-pitched three fellow Rev companies to win all of the $100,000 in prize money.
FairVentures, meanwhile, opened an innovation lab at the Hub in February, joining a growing roster of large corporations seeking to connect with the region’s startup community as they work on new products.
In late February, they both took part in an event called Insurance Disrupted, where more than two dozen startups met with insurance companies to discuss how to bring the 150-year-old industry into the age of innovation.
“We went into it thinking it was more about insurance and less about investment,” Forestell said, “but when we met (people from FairVentures and Federated), they were very interested in the company itself, and built an insurance product specifically for Dozr, which was pretty exciting.”
For its part, FairVentures was eager to connect Fairfax-affiliated insurers with complementary companies such as Dozr, which need new kinds of insurance to suit the modern economy. In this way, the insurers become more agile and creative, while tapping into new lines of business.
“I think it shows the ability for our insurance companies to think nimbly and think differently in terms of wanting to build products for these emerging businesses and emerging markets,” Dave Kruis, Director at FairVentures, said in an interview.
“I think we will continue to do things like that. Dozr isn’t the only startup or company that’s doing things in the sharing-economy space; there are others that our insurance companies are speaking to, in terms of providing similar products, whether it’s car-sharing or other types of asset sharing,” Kruis said.
“Fairfax chose to put a lab in Communitech for this exact reason. We wanted to be in an environment where emerging businesses and emerging technologies are surrounding us.” – Dave Kruis, Director, FairVentures
By the time Rev Demo Day rolled around in May, talks between FairVentures and Dozr had progressed to investment, ultimately leading to today’s funding announcement.
“We’re looking to invest in companies that have good businesses, but also businesses that are complementary to the Fairfax family, or can take advantage of that Fairfax family,” Kruis said, adding that “Dozr, in a way, is a perfect channel for insurance. It’s a new insurance product for a new service or solution category, in the sharing economy.”
In turn, Dozr stands to benefit from Fairfax’s broad market reach, which the $2.5-million investment will help it to capitalize on.
“Fairfax chose to put a lab in Communitech for this exact reason,” Kruis said. “We wanted to be in an environment where emerging businesses and emerging technologies are surrounding us. Without that view or that presence in the building, we wouldn’t have been exposed to folks like Dozr, and a lot of the other startups we’re working with on other projects.”
He continued: “This is one example of several really good relationships that have formed out of us being in the building, and Communitech helping to make those connections.”
For Forestell and co-founders Erin Stephenson (his wife) and Tim Forestell (his brother), it’s been a whirlwind of activity since they hatched the idea for Dozr during a family vacation in April of 2015, a scant 17 months ago.
They were already 10 years into a large and successful landscaping business, based in Guelph, and had been thinking about how they might wring more revenue from their fleet of equipment, which sits idle for considerable chunks of time.
“We discussed opening up a small rental company just to get our equipment moving, but we didn’t have an answer, and we were leaving for vacation,” Forestell said. “We went to Florida and we rented a house on the beach, and our entire family came down.”
Sitting on the beach in front of a house they’d rented through a platform similar to Airbnb, they marvelled at how affordable it was compared to what beachfront hotel rooms would have cost.
“So it was just, ‘Holy cow, this is what we should do with our equipment,’” Forestell recalled. “And from that point on, we’ve been running. It was, ‘We’re not the only people who have this problem; let’s solve the bigger problem.’”
They invited 10 contractors to take part in a soft launch of Dozr in August 2015, but that number quickly ballooned to 25 when others caught wind of it. Dozr was accepted into the Google for Entrepreneurs program at the Communitech Hub last September, and launched publicly last November, which really set things rolling.
The Rev program – which focuses on sales and marketing for companies that have already established market fit for their product – helped greatly in enabling Dozr to bring on so many clients so quickly, Forestell said.
“They helped us build a repeatable sales process,” he said of the program’s mentors. “Also, Communitech in general, along with the Rev program, has helped us get a number of different introductions to people in the technology industry,” including Tanner, their new CTO.
A big part of Tanner’s role will be readying the Dozr platform for expansion into the U.S., Forestell said.
Photo: (Left to right) Dozr co-founders Kevin Forestell, Erin Stephenson and Tim Forestell
Communitech is a partner of Startup HERE Toronto. This article originally appeared on their site.