CEO Bobbie Racette one of the first Indigenous women in #CDNtech to close a Series A round.
Virtual Gurus has secured an $8.4 million round due to increased demand in the United States (US) for its virtual assistant marketplace.
Led by CEO Bobbie Racette, who is a Cree-Métis and LGBTQ+ woman, Virtual Gurus is on a mission to disrupt the virtual assistant market through curated matches and a talent marketplace that focuses on employing historically underrepresented individuals.
“Tons of clients are leaving some of our competitors and coming to us because of their diversity angle,” Racette said in an exclusive interview with BetaKit.
Racette is one of – if not the first – Indigenous women to close a Series A round in Canadian tech history.
Virtual Gurus launched in the United States (US) nine months ago, and with what Racette called minimal proactive marketing, the market has become a major component of the company’s business. The US makes up around 30 percent of the startup’s current revenue after officially launching in the country.
“I think what it is, is the US is ahead of us in Canada, and they’ve already had fractional administration support long before we did. I think that the fresh meat coming in is good for them.”
Virtual Gurus is a talent marketplace that uses technology to match organizations with virtual assistants from Canada and the US. Through a monthly subscription service, companies can hire remote, virtual assistants for administrative needs, office management, sales, etc. Virtual Gurus also offers specialized services for the real estate, legal, and medical sectors.
The Series A capital, which includes $5.4 million in equity with the remainder in non-dilutive capital, follows a busy few years for Virtual Gurus. Racette bootstrapped her company for around three years before securing $1.2 million in initial financing in early 2020, followed by more than $1.7 million a year later. The startup’s total equity financing to date is $10.4 million. In that time, Racette says Virtual Gurus has seen significant growth, with a 129 percent year-over-year increase in revenue.
“That is thanks to the pandemic, because where companies were laying people off we realized that fractional EAs [executive assistants] were perfect for them,” said Racette. “Whereas on the other side, we were able to pick up all of the administrative staff that were getting laid off.”
The Series A round was led by the Telus Pollinator Fund for Good, and saw participation from the Alberta government-backed Accelerate Fund, which matched a $750,000 angel investment. Virtual Gurus also attracted return investors for this round: Raven Indigenous Capital Partners and The51, both of which have invested in all of the startup’s rounds to date.
Racette is one of – if not the first – Indigenous women to close a Series A round in Canadian tech history. Though little data is collected about such statistics, Racette says she connected with her network and investors in Canada to verify and no one was able to identify another Indigenous woman to have done so.
“[I’m] 99.9 percent sure that I’m the only one,” said Racette who noted she knows between 10 and 20 young, Indigenous women who want to start tech companies but are scared to do so.
“My ultimate goal with this at the end of the day is to encourage all those other young Indigenous women out there that they can do it too,” said Racette. “I’m really excited about that part the most, to be honest. Maybe this will inspire some other Indigenous women out there. I really hope it does.”
The fear Racette pointed to is not unprecedented. Indigenous Peoples in Canada have long faced systemic barriers that include low participation in the entrepreneurial ecosystem, limited representation within tech companies, and limited access to venture capital.
The latter challenge is one reason why Raven Indigenous Capital Partners was created. The firm launched a $25 million CAD fund to not only provide capital but help address the resource gap faced by Indigenous entrepreneurs.
With the buy-in of 38 investors across Canada and the United States, including the TELUS Pollinator Fund for Good, Raven Indigenous Capital Partners has invested in companies like Animikii and PLATO Testing.
“Virtual Gurus is the embodiment of diversity alpha – a founder and company that proudly expresses and reflects Indigenous values in building a cutting edge network effects solution,“ said Stephen Nairne, chief investment officer at Raven Indigenous Capital Partners.
“Because I’m an Indigenous, LGBT woman myself, I have struggled through barriers and seen a lot,” said Racette. “It’s something that has always been true to me.”
“I have a platform, I have a voice. I’m going to do it.”
Racette recounted that when she first launched Virtual Gurus she wanted to focus on creating a diverse workforce marketplace, but found it was difficult to balance with building the company’s minimum viable product.
“But as the platform started evolving and getting bigger and bigger, and we started getting that brand and that name going, I started thinking that this is my time that I can leverage it. I have a platform, I have a voice. I’m going to do it,” she said.
Racette, who struggled to raise capital in the early days, recalls potential investors shying away from Virtual Gurus because of its diversity and inclusion focus, suggesting instead that she focus on just growing her company. The CEO rejected those suggestions – and has since found the diversity focus to be both a differentiator and a reason why companies are choosing Virtual Gurus.
The company focuses on supporting Black and Indigenous people of colour (BIPOC) individuals, people from the LGBTQ2S+ community, single and stay-at-home parents, and those with alternate abilities.
Virtual Gurus customers include OutTV, Borrowell, and 3Strands Global Foundation, with the startup claiming it was both the cost savings and support of environmental, social and, governance (ESG) goals that attracted them.
“They’re why we do this,” noted Racette. “Because all of those people struggle with finding work, all of them have been overlooked, all of them have not been getting the opportunities.”
“Not only are [Racette and the Virtual Gurus team] achieving impressive growth and a significant scale trajectory, but they are doing it all while building economic opportunity and impact for underrepresented talent,” said Virtual Gurus investor Shelley Kuipers, co-founder, The51. “Bobbie is undoubtedly an inspiring founder for investors, entrepreneurs and those aspiring to be.”
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Racette said Virtual Gurus chose its investors carefully to support its mission, and who noted that the startup turned down higher valuation term sheets to bring on Telus because of the potential to partner with the firm.
Launched in late 2020, the Telus Pollinator Fund For Good is a $100 million social impact fund. Aligned with Telus’ overall social goals, the fund is focused on investing in entrepreneurs building solutions in healthcare, furthering social and economic inclusion, ensuring sustainable food production, and supporting the natural environment.
“We have a lot of, let’s say, growth opportunities with Telus than we did with the other [investors],” said Racette, who noted that Virtual Gurus will be working with the Telus firm to build partnerships. Though she did not provide additional detail, Racette said partnerships would likely include Virtual Gurus’ Slack integration.
“As the business world becomes more virtual than ever before, we’re confident in the team’s approach of leveraging advanced technology and machine learning to create connections between organizations and skilled virtual assistants that closes the distance gap for those who are looking for an alternative to 9-to-5 office work,” said Blair Miller, managing partner, Telus Pollinator Fund for Good. These connections will help to build a stronger virtual workforce and will create the business community of the future.”
In addition to winning more of the American virtual assistant market, Virtual Gurus is focused on investing in artificial intelligence, creating an offering that is tailored to enterprise customers, and growing its 35-person team.
When it comes to the automation aspect, Virtual Gurus plans to bolster its matching system but also use the data to optimize job opportunities for workers and predict how much work customers will need to improve their experience as well.
“Virtual Gurus’ entry into machine learning will ultimately improve the quality of work, connection, and income capacity of their virtual assistants,” said Kuipers. “We continue to be inspired by the work Virtual Gurus is doing to drive impact and opportunity for underrepresented groups.”