Trading information for KKR & Co. flashes on-screen during a day at the New York Stock Exchange in New York on Aug. 23, 2018.Brendan McDermid/Reuters
U.S. private equity giant KKR & Co. Inc. has invested US$55-million into Essential Accessibility Inc., a Canadian company that helps organizations to comply with digital accessibility guidelines.
Essential, which is headquartered in Toronto, helps clients configure their websites and apps so that they are accessible for people who are vision- or hearing-impaired, or have cognitive disabilities. The company’s business has grown as more jurisdictions have developed mandatory accessibility standards for organizations with a digital presence.
Common accessibility issues include using low-contrast text, which can be difficult to read for some users, and not adding descriptive text to explain images, which are useful for the visually impaired.
“No company’s going to tell you that they want to build a website that excludes a part of the population, but unfortunately most of the websites in Canada today are excluding a big part of the population,” said Mark Steele, the chief executive officer of Essential.
Samsung Electronics Co., Ltd., Marriott International Inc., and Merck & Co. Inc. make up some of the company’s more than 500 clients, who pay monthly for Essential’s services.
“[Guidelines are] constantly evolving as technology evolves,” Mr. Steele said. “The guidelines have to be tweaked a little bit to ensure that, again, nobody is left behind.”
The need for constant updates is why Mr. Steele says it makes sense for Essential to be a subscription-based company.
“Accessibility is kind of like security. You just need someone there all the time providing a managed service or you’re going to fall behind.”
Subscription businesses are also attractive to investors because monthly recurring revenues tend to provide steady cash flow. Mr. Steele said Essential will use the capital from KKR to automate more of its testing processes, and to scale globally.
“This is our opportunity to really capitalize on the market,” he said. “Once you get these customers and you’re their partner, they don’t leave, they don’t switch accessibility platforms. It’s pretty sticky so it’s all about land and expand right now.”
Mr. Steele says Canadian businesses are rapidly upgrading their sites to comply with guidelines set by the Accessibility for Ontarians with Disabilities Act, which affects companies with one or more employees in Ontario. After June 30, companies must meet standards set in the internationally recognized Web Content Accessibility Guidelines, such as having live captions for audio, and allowing users to resize text. Organizations with 50 employees or more can face daily penalties of up to $100,000 if they are non-compliant.
“That’s what’s driving our business in Canada because a lot of companies are like, ‘I better figure this out because I don’t want to be sued, or I don’t want to get a fine,’” Mr. Steele said.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.