It’s got to be the best kept tech secret in town.
On the 15th floor of a modest downtown office tower, a Calgary-based enterprise software company is bursting at the seams.
And no, it’s not a new company that has been attracted from far away to set up shop in town to take advantage of the talent pool, bargain-priced office space and an affordable standard of living.
Solium Capital — which has developed online software platforms that integrate and manage the many different iterations of equity compensation plans around the world — is one of those 18-year, overnight success stories.
Based right here in Calgary.
It’s a company that has achieved critical mass through a combination of opportunistic acquisitions and organic growth, while sticking to what it knows how to do, rather than be a magpie and grab every bright, shiny object.
In fact, Solium is one of the few Calgary start-ups from the last tech boom of the late 1990s that is not only still around, but now boasts a global reach.
Not that it didn’t have a few growing pains along the way. By his own admission, chief executive officer Marcos Lopez says Solium, founded by two stock brokers from Dominion Securities, went public too early – in 2001 with $94,000 in revenue. By 2002 it was needing to be refinanced, restructured and repositioned.
Since then, Solium has become a global, Calgary-based enterprise software firm with one million people using its platform and with offices in the United States, the United Kingdom, Europe and Australia.
It has signed on 46 of the TSX 60, and won mandates from companies the likes of Adidas, Shopify, Uber, Google, Barclays and Morgan Stanley; Heineken is a recent addition to its client roster.
What it does well is manage the complex issues associated with stock compensation plans for both private and publicly-traded companies. These are the issues that always seem to come with indecipherable acronyms in multiple jurisdictions, in a variety of currencies, and in the middle of a maze of compliance and tax rules that differ from country to country.
In some respects, Solium hit its sweet spot as regulations and scrutiny on equity compensation plans have increased around the globe.
It does this through a combination of its sophisticated software platforms — Shareworks and Transcentive — and an old-fashioned commitment to customer service.
One of the secrets to its “overnight” success, Lopez says, is the fact it did get its start in Calgary.
“Solium couldn’t have started in Toronto. We wouldn’t have gotten any traction,” he says.
AEC (Alberta Energy Company) was Solium’s first client and word has it Big Rock Brewery, also an early client, paid part of its bill in beer.
“They (AEC) took a flier on us. . . but that is the magic of Calgary; it’s in the DNA. AEC took that risk, so did CP Rail,” said Lopez. “We evolved in the safe petri dish of Calgary. In many ways, it’s a great ‘Canada bet on itself’ story.”
And that petri dish had the perfect conditions that pushed Solium to expand its horizons and develop a product and skill set that can address complex issues arising for companies operating in multiple jurisdictions.
Not only is Solium Calgary’s best kept secret, having been around as long as it has. Lopez is also in a unique position to offer a few observations on the skills needed to achieve that seemingly elusive goal of economic diversification.
“It can’t just be about cheap office space. . . and the vacancy rate,” he says. “Companies that we want to attract here don’t care about the cost of office space – they want skill sets.”
Lopez says that while Calgary has tech talent, it’s not the kind of place that builds tech products; his observation is that we’re better at project management.
The product life cycle for technology is much different than what it is for the energy sector – and that means a different skill set.
Calgary also lacks what Lopez calls an “anchor tenant” – in this case, a big tech company that acts as a magnet and draws talent to wherever it is.
But, Calgary did have that for a time – in the form of Nortel. When Nortel imploded, however, some talent stayed, but not enough. Unlike the demise of Dome Petroleum, which caused a starburst of its own as former employees went on to create billions of dollars in value in the energy sector, the end of Nortel didn’t result in the creation of the same kind of critical mass in Calgary’s sector.
For Solium, managing the stock-based elements of compensation systems is not exactly as sexy as being a visible disruptor. But as compensation plans have become increasingly complex, solutions offered through companies like Solium ensure they are managed properly.
But there aren’t too many Soliums out there. So, while Lopez doesn’t exactly see Solium as a disruptor, others might take issue with that. This is the domain of companies like E-Trade, Fidelity and Computershare – and Solium is competing on the same field.
And, the company is about to get bigger.
Solium recently struck “white label” deals with Morgan Stanley and UBS; it already has one with U.K. banking giant Barclays. What this means is that Morgan Stanley and UBS take Solium’s product, put their brand on it and market it to their client networks. In return for a licensing fee, it’s a way for Solium to access new distribution channels.
But Lopez knows Solium has to continue to evolve.
That means looking for new markets and possible new business lines.
Lopez and his team are still trying to find people to meet their immediate needs. Solium hired 50 software developers last year – and is still looking for more.
Solium’s story isn’t the kind of tale that’s been heard much in the last two years, but having a Calgary-based software firm succeed on the international stage is a great example for other companies thinking about setting up shop here.
It shows that the raw ingredients do exist to diversify the economy and should be seen as a calling card for the city in terms of what is possible.