Big investors position Medgate to lead workplace health and safety globally

Big investors position Medgate to lead workplace health and safety globally

ExportWise is counting down our 10 best performing stories from 2016. This story, first published on May 19, is #8 on our list.

Since becoming president in 2003, Medgate Inc.’s Mark Wallace has successfully explored different paths to international growth. Now, with a group of powerful backers onboard, he wants to take the 30-year-old, privately-held Environmental Health & Safety (EHS) software provider into even more markets worldwide.

Medgate recently received an investment said to be worth more than $100 million from Silicon Valley’s Norwest Venture Partners, Toronto’s Georgian Partners, and the Bank of Montreal. The team is “uniquely equipped to help take our company to the next level,” Wallace says.

The Toronto company’s cloud-based subscription EHS software is already in use in more than 70 countries, helping clients manage risk in potentially hazardous workspaces such as mining, oil and gas, and chemical manufacturing. Now Wallace wants the company to be the world’s dominant player in that billion-dollar market by continuing to help companies increase productivity and promote the health and safety of their employees.

His game plan includes strategic acquisition, an approach that has served the company well. What started as a small operation in the 1980s now generates more than $30 million per year in revenue and employment for close to 200 people. When Wallace joined Medgate, it was already doing business in the U.S., but was losing money. After turning the company around, he began to focus on opportunities in other markets, and homed in on the U.K. A sales rep hired there eventually landed oil giant BP plc, but was having trouble gaining traction with mid-size companies.

“You reach a stage where you wonder, ‘Should we service this market from Canada or open an office and establish a larger presence in the U.K.?’” Wallace recounts. Instead, in 2012 he decided to buy an occupational health software company already established in the region. “When we are entering new markets, I try to keep an eye out for the strategic acquisition because it accelerates your penetration and gives you critical mass and credibility,” he says.

A few years later, the company secured a deal with Rio Tinto Group, the British-Australian multinational mining company. Following that, Medgate signed a contract with a diamond mine in the Northwest Territories owned by Melbourne-based BHP Billiton Ltd., the world’s largest miner. BHP liked Medgate’s product so much, it began using it in Australia and eventually throughout its vast global network.

Medgate now has six people in Australia looking for new clients and making sure that the existing ones are well supported when it comes to configuring the software, training people, and implementing upgrades. With the back-office operations in England and Canada, the company can now offer 24/7, “follow-the-sun” support to all its customers.

Wallace knows it’s a bit of a cliché, but in this case it happens to be true. “If you take care of your customers, the business will take care of itself,” he says. “It’s less about sales and more about a good software product and fantastic customer support. BHP sold themselves and took the initiative to roll out our product as a global solution.”

Medgate currently does about half of its business in the U.S., about 15 per cent in Canada, and 35 per cent outside of North America.

Next up are target markets in the Middle East and Latin America, and Wallace has hired employees in Toronto who are familiar with doing business in those areas. “If you want to service global markets from Toronto, you need to hire employees who come from those areas, speak the languages, understand the business culture, and can cultivate influential local partners,” he says. “We have done that now and are already having some success.”

And, of course, since most of Medgate’s costs are in Canadian dollars and most of its revenues are in U.S. dollars or Pounds sterling, the current exchange-rate environment has served it well. “The decline of the Canadian dollar has worked greatly to our advantage,” Wallace adds.

Five Questions with Medgate President Mark Wallace

1. What was the company’s first export sale?

The 3M Co., based in Maplewood, Minn.


2. How did that first export opportunity arise?

Early on, 3M Canada asked our company to build an occupational health and safety software system for them and it was ultimately rolled out to the United States.


3. When it comes to exports, what do you know now that you wish you had known when you became president of Medgate 2003?

We’re now more thorough in our research before moving into a new market in terms of language, number of companies that fit our market segment, and legal or regulatory barriers. We typically do more spade work from Toronto now so when we actually make the investment in feet on the street there is an existing database of prospects to call on. Also, I have become more open to looking at strategic acquisition as a way to accelerate penetration of a market.


4. How has the trading world changed since you started in business?

Because it is a much more global marketplace, customers are buying a product not just for head office, but for their global operations. If we sell the product to a London or Chicago head office, we may have to enhance that product so that it will also cover their satellite operations in China or Japan. You can’t go into a new market and assume that your existing software product is going to apply seamlessly.


5. What is the No. 1 thing new SME’s need to know about export and trade?

Never stop listening to your customers and don’t assume customer requirements in a global market are the same as your home market.

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