Acquisition #12 - Onsched
We've been a little quiet over here as we start rolling out XO 2.0, using outside capital instead of our own cash to acquire larger businesses. It's taken a bit of time from deal #11 to #12. We didn't buy anything for 9 months. These periods of inactivity are typical for us as we look to deploy into excellent businesses at reasonable prices. We've previously gone about a year without buying anything because we couldn't find something we loved. We've looked at somewhere around 300 deals over the past 9 months.
But that ends this week. We are thrilled to announce our latest acquisition: OnSched, a mission-critical scheduling API tool available at OnSched.com.
What is OnSched?
OnSched is a developer tool designed for creating complex scheduling applications. It has a strong presence in the healthcare market, especially in Canada, but is also gaining traction in various other sectors.
Current Status and Growth
OnSched handles an average of 300,000 bookings per month, with peak usage reaching up to a million bookings during the November-December period. In the summer months, it sees around 200,000-250,000 bookings. The business currently generates about $500,000 in revenue with a reasonable growth rate. These figures are in Canadian dollars.
During the COVID-19 pandemic, OnSched experienced a significant usage spike, but it has since stabilized. The product follows a usage-based pricing model, offering opportunities for capturing additional revenue through overage fees.
Compliance and Growth Opportunities
One of our initial observations was the lack of SOC 2 and HIPAA compliance, which has been a barrier to closing larger deals. Our first step will be to achieve these compliance certifications, which should unlock significant growth potential.
Additionally, OnSched has under-invested in top-of-funnel content. We plan to implement our proven content playbook to drive more inbound interest, coupled with the new compliance certifications to attract larger clients.
Key Employees
The acquisition includes two key employees: a full-stack developer and a sales lead. Both have been running the company lean and have great ideas for improvement. Achieving compliance will be a huge win for our salesperson, enabling her to approach previously inaccessible clients.
Retention and Future Prospects
OnSched boasts impressive retention metrics, with many customers showing 100% retention rates. This high retention is due to the critical nature of the scheduling API, making it difficult for customers to switch providers once implemented.
This acquisition came to us off-market, showcasing the importance of our continued efforts in writing and sharing about our work. Developer tools, in particular, have proven to be very sticky, making them a valuable addition to our portfolio.
Looking Ahead
We are in the process of asset transfer and getting our feet under us with OnSched. We are excited about the opportunities ahead and look forward to applying our successful strategies to ensure OnSched thrives. We hope to secure similar deals for future funds.
