On March 12 2020, Robert Fenton sent out his first pitches to potential venture capital investors interested in backing his eight-year-old business, Qualio.

It was a time of great fear and confusion as the Dow Jones Industrial Average plunged by 10 per cent in just hours as the American markets began to realise that Covid-19 was not going to be constrained to China.

“I screenshotted on my phone the lead story from The Wall Street Journal,” Fenton tells me, adding that the headline on this story was a bleak one: “Stocks plunge 10 per cent in Dow’s worst day since 1987.”

It was an inauspicious time to raise capital for a tiny business founded by Fenton, who was born the same year as Black Monday some 33 years ago.

“Seeing that year on the screen I thought that is as far back as my history goes,” Fenton recalls. “But we believed in our business, so we decided to press forward. We ended up being significantly oversubscribed.”

Fenton closed an $11 million series A funding round on July 26. The round was led by Storm Ventures, a 20-year-old Sand Hill Road specialist in investing in enterprise software. Among Storm’s investments is Algolia, which incidentally powers the search functionality for The Currency. Sorenson Ventures and Operator Partners also came on board for the first time.

Existing investors MHS Capital, a backer of online education company Udemy and crowdfunder IndieGoGo, as well as Dublin-based Frontline Ventures, the first backer of Pointy which was sold for $160 million in January, also invested again. 

Fenton closed all of the funding standing at his desk in his office in his home in the Mission District of San Francisco. He did not meet any of his new investors in the flesh during months of negotiations around term sheets. “It was all literally just like this. I am in the very same room talking to you as I was with them.”

It wasn’t easy, and Fenton worked hard to get them comfortable with his fast-growing company – one that is still far from the $100 million-plus annual recurring revenue business it aspires to become. Fenton said economics had not decided Qualio’s choice of investors.

“We chose them based on values alignment. At all our meetings investors are testing you. You want to see if they ask good questions and do they get it. The investors we have really do.”

“We invited them all on to our company all-hands video call-through to introduce them to the broader company but no, I couldn’t introduce them personally. Hopefully soon!”

In the middle of a pandemic unprecedented since the 1918 Spanish flu, Qualio had done it.

Bootstrapping to $1 million

I first met Robert Fenton in April 2016 at Qualio’s then Dublin office in the Guinness Enterprise Centre, a non-profit workspace in the Liberties at the back of the famous brewery.

Fenton had just raised $300,000 from 500 Start-Ups, an early-stage venture capital fund which has backed startups like Udemy and Intercom, as well as Enterprise Ireland.

Fenton had just opened an office in San Francisco where he had moved in 2015 and employed just four people. A trained pharmacist, Fenton had worked in places like Pfizer and Leo Pharma.

In 2012 he got the start-up itch and founded Qualio. It picked up interesting early customers like Centogene, a German rare disease company which listed on the Nasdaq in 2019, and Dimension Therapeutics, sold for $151 million in 2017.

“We have multiple six-figure revenues,” Fenton said in his 2016 interview. “Our plan is to pass the $1 million in the next six to nine months.”

I ask when did Qualio hit that $1 million annual recurring revenue target? “We did that in 2018,” he replied.

At the time Qualio broke the $1 million benchmark it did so after raising only that initial $300,000.

“We were basically bootstrapping,” Fenton said. “When you move over to the Valley, that type of money doesn’t pay one senior executive salary for the year.”

Fenton credits his wife, Dana Al-Nazer, a veterinarian, for supporting him in his early days in America.

By 2018, Qualio was proving itself. It was now ready to think bigger.

Fortune favours the brave

In 2019, Qualio decided to raise some additional firepower. “We had kept our heads down. We kept iterating. We used only a small amount of capital.”

“Our big challenge was we were really early to the marketplace in 2014. The consensus opinion in the venture community was, there isn’t really room to build a product doing what we do,” Fenton said. “It wasn’t ready for it.

“But we believed the signs were there. Our customers were growing. We saw the trends in the marketplace.  We had passed $1 million in recurring revenue and then we felt we had a really strong product-market fit here.

“We have customers who are upgrading over time and having a great experience. What was holding us back was being able to invest in growing the business. We had run a business in the most expensive city in the world without any investor financing… so we raised $2.1 million last July. That was a major phase shift for the business.

“We weren’t growing at venture rates of 300 per cent plus a year but we were growing fast, and we were bootstrapped.

“We had customers who loved what we did. We had the data and the customers to prove there is something here.”

Fenton said he used the $2.1 million to build his team, strengthen Qualio’s ability to go-to-market, and demonstrate it was in a market potentially valued in the billions.

“Those were my three tasks last year… We grew over 60 per cent a quarter from then onwards for the last four quarters.”

Qualio made a series of experienced hires between late 2019 and early 2020. Brandon Goldman, who had been informally advising Qualio since 2016, quit SurveyMonkey at the start of the year to go full-time as vice-president of sales.

Rich Taylor became head of marketing last December, leaving a similar role in push notification developer Pusher behind him. Head of engineering Aidan Donnelly left the security of six years with Amazon behind him last August.

As this team was coming together Fenton decided to close Qualio’s three offices in Dublin, San Francisco and Poland to become a fully remote company.

The Qualio team in Orlando, Florida in October 2019: “People often forget that with a remote company, finding time to be together is incredibly important. And as a remote company we get the opportunity to organise meaningful events around the world to bring our team together with the savings on office space,” says Fenton.

This means it can have engineers living all over the place. In Ireland, he has employees in Sligo, Clonmel, as well as Dublin. “We believe culture and competency beat geography,” Fenton said. “We were already working remotely before Covid-19.”

Fenton said his own experience growing up in rural Co Cork meant he could relate to why engineers wanted to live in villages or towns for quality of life reasons. 

Qualio has staff in Covid-19 hotspots like northern Italy, Texas and Florida. “You are very concerned about their wellbeing,” Fenton said. “As a business, we have accelerated through Covid-19.”

Fenton said he was advised not to raise capital because of the crisis but decided to go ahead anyway. “Fortune favours the brave,” he said. “My job was easy as my team was delivering amazing numbers.”

“We are at .015 percent of where we want to get to”

Robert Fenton grew up in Mitchelstown, a town in Co Cork of just 3,500 people. It is famous for its cheddar, versus the Mission District which is known for its Latino origins, striking murals and in more recent years hipsters.

Fenton is sporting a thick beard and baseball cap with a rocket ship on it when we speak. His accent is Irish but there is definitely a Californian tinge from his years living there. Fenton was not, however, an obvious candidate to found a San Francisco business.

“I don’t fit some of the stereotypes,” Fenton laughs. “I am from a super small town, and I studied pharmacy and not computer engineering.”

The textbooks signs of an inquiring mind, however, were there. “I was always taking things apart to see how they worked,” Fenton said. “My Dad was a telecoms engineer and that type of thing was my fun.”

Fenton spent hours watching television, absorbing shows about science and inventions, while his peers watched Australian soaps or football. He was smart too, representing Ireland at chemistry while in school.

After qualifying in pharmacy, Fenton worked for big multinationals like Pfizer and Leo Pharma. But he wanted to work for himself.

He was 22 when in 2010 he set up his first start-up, a compliance content and services company for Irish pharmacies called EasySOP. It wasn’t a bad idea, but it was a niche one.

Fenton used the cash flow from this business to pivot to a better one. He founded what was then called Zendoc, a software firm which was focused on compliance for SMEs within the life sciences sector.

“We estimate the potential market for our product at over €1 billion today and growing strongly,” Fenton told The Irish Times in 2014. “Our main competitor is paper.” Fenton was now aiming much higher.

Zendoc rebranded as Qualio, and its product became much more sophisticated. Today it is a cloud-based management system designed to support the entire life sciences ecosystem. It is used by businesses in the medical devices and pharma sector, and contract service providers.

Its customers tend not to be decades-old behemoths, but instead are fast-moving disrupters. Just because they are not household name drug giants, however, does not make them small.

Take Greenlight Biosciences, a customer listed on Qualio’s website – this business closed a $102 million series D round this summer.

Or take Poseida Therapeutics, which is backed by Dublin-based Malin and another customer – it just floated on Nasdaq.

“We are going to do whatever it takes to build a large business because I think the market deserves it.”

Robert Fenton

Fenton first went to the United States with Qualio in the summer of 2015. He did a two-week EI access Silicon Valley programme, and also considered setting up in Cambridge near Boston.

“I was conflicted. Boston is a lot closer to home, but I really loved the people here in California, the ambition and also the casual nature of doing things,” Fenton says. “People here have built huge businesses and they would happily share how they did it.”

Ultimately, Fenton said he chose the west coast after going to a talk in Boston by Eric Paley, an experienced venture capitalist who was speaking to a group of high school students.

“Somebody asked him, Mr Paley, ‘Should I found my start-up here in Boston?’ He said: ‘Boston is the second-best place in the world for a start-up.’ So I felt after that, why go with second best?”

“I wanted to build a company,” Fenton said. “We were waiting patiently for the market. We were constantly trying to prove this belief we had. We never got any data to support us stopping. It has been awesome to see the market is now ready.”

Not raising more money earlier has allowed Fenton to remain the largest shareholder in Qualio. Fenton has spent over a decade chasing start-ups. “I was scraping by for several years. You do wonder, are you doing the right thing? And you just never know…”

And now, with $11 million banked recently, clearly Qualio is moving fast. How big is the opportunity for Qualio? “This is a multibillion-dollar business. This is huge,” Fenton replied. “Make absolutely no mistake, we have very large ambitions for what we are doing.

“We need to scale that up appropriately. The playbooks for Saas companies have been written. But to be really successful you also have to get a break.

“One of our bets is we are going to overinvest in our product because I think that in our space the industry and market is starved of compelling software,” Fenton said. “You hear from our customers what they are doing and how amazingly impactful what they are trying to do is. Helping them get there matters a lot to me outside of commercial success.”

How soon will Qualio raise more money? “It depends on so many factors,” Fenton said.

“Do we need capital? You know Teamwork in Cork? They didn’t go the VC pathway at all. Then you have companies like Qualtrics who built a huge business and only took a lot of capital in at the end [before it was sold for $8 billion] because they could – and it was not very dilutive.

“It depends on where the business is. We are going to do whatever it takes to build a large business because I think the market deserves it,” Fenton said.

The latest chance to meet for Qualio as a team was in California in February, before the Covid-19 lockdown.

Is Qualio worth $100 million after this raise? “Yes. I wouldn’t have taken the capital if I didn’t think I could take it there and beyond,” Fenton said. “I would be lying to both myself, the team and our investors.

“At our core we are a very scrappy, capital-efficient business. We are best of breed. We took this capital because we see the opportunity to build a category-defining business in possibly the most important industry in the coming decade. Where we end up the future will tell us.

“But in order to achieve those types of outcomes, you have to challenge your thinking. I said internally when we had our all-hands… We are at .015 per cent of where we want to get to.”

Since March, Qualio has offered its products for free to any company working on products related to Covid-19. In Ireland, it is being used by Open Source Ventilator (OSV) Ireland, which requires its help in facilitating collaboration among many different people.

Fenton said he can’t publicly name other customers using it for Covid-19-related purposes. “We wanted to help our team members feel they were being positive actors and not just feel they were being acted upon by the world.”

“The Pfizers and the Medtronics used to be where it is all at”

We are nearing the end of our interview. Robert Fenton said he saw three things happening that would help Qualio continue to grow. In 2011 Andreesen Horowitz, the influential venture capital company, said that “software is eating the world.”

Fenton said Andreesen Horowitz sees the next big wave as life sciences, noting it closed a $750 million third fund dedicated to the sector only in February.

“This next decade is going to be defined by a rate of pace of innovation in healthcare we have possibly never seen before and we are designed to support that wave,” Fenton said.

“The smartest people in the world are saying that (life sciences) is where things are happening because of things like computational biology, medical AI, the rise of consumer-led interest in their own healthcare…”

“The Pfizers and the Medtronics used to be where it is all at,” Fenton said. “We are seeing an enormous demographic shift which we call the ecosystem model.”

“We have these smaller, faster, highly-connected companies which are incredibly interdependent and working together to get products to market. These are the types of companies we work with all the time.”

“There are a wave of companies coming up right now that are powering the next wave of healthcare and Qualio is one of those companies. It is one of those critical pieces of infrastructure helping them do it.”

“We are the first technology product in any category that is designed to support the entire life sciences ecosystem. We are a common layer across our medical devices bucket, our pharma/biotech therapeutics bucket and then our contract support bucket.”

“As we become a method of collaboration upstream and downstream across all of these companies, it goes beyond quality and becomes core, critical technology infrastructure. Our customers will often tell us we are their most important piece of software.”

“The long-term trend is to accelerate the trend from an old-world way of working towards a new way. That is something we are really starting to take off. Remote working is just more gas or petrol in the fire.”

“Great products win today. In the old days, enterprise software was dominated by great sales people and poor products. That has turned on its head.”

“We have a big vision about where we want to take this. Our ten-year-plus goal is to enable 100,000-plus teams to bring medicines to market successfully. That is about the size of the entire marketplace today,” Fenton said.