How Tulip CEO Ali Asaria Retooled His Business Twice and Landed $100M Investment
The journey from idea to IPO is a difficult one. In this five-part series, we look at how founders scaled their startups and reached new milestones.
When Ali Asaria founded Tulip, he was missing one, seemingly critical, thing: a product.
The serial entrepreneur had worked at BlackBerry and founded early e-commerce success story Well.ca. After selling that company, Asaria was looking for his next challenge. He knew he wanted to stay in retail—he had a wealth of experience, the intellectual property from Well.ca and a team of mobile commerce experts on hand—but he had no specific idea of what product to build. So, he did something that would become a hallmark of Tulip’s approach to business: he asked potential customers what they needed.
“We went to the biggest retailers and asked them about their toughest problems. They’d say, ‘Look how badly my stores are running; the software behind them is so old-school,’” Asaria recalls. “We looked at their problems and knew we could solve them really quickly, if they gave us a chance.”
In 2013, they used the insights from those conversations to build Tulip, an omnichannel retail platform that allows companies to sell via web, mobile or in-store. Asaria quickly realized, however, that companies didn’t actually want an entire omnichannel platform, even if it would solve all of their stated problems—“too many words,” he jokes. Within months, he pivoted to clienteling, the retail term for customer relationship management. Tulip developed a way for luxury retailers—including Mulberry, Salvatore Ferragamo, Kate Spade, Coach and Michael Kors—to stay connected to their highest-spending, most loyal customers.
Luxury retailers have long prioritized building and maintaining relationships with their clients. Traditionally, their top employees have kept “black books” filled with those shoppers’ contact information and shopping preferences.
“The problem a lot of these retailers were having was that if a Harry Rosen store associate left and joined Ralph Lauren, they would take their black book with them,” explains Asaria. “Those black books are one of their biggest drivers for sales.”
Tulip digitizes those records, which makes it easier for employees to let customers know when a long-awaited dress or shoe arrives at the store. Crucially, the company’s platform also allows the retailer to “own” that information.
Solving customers’ problems
This dedication to solving his customers’ headaches is one of Asaria’s biggest strengths, says Dennis Ensing, the chief venture advisor at MaRS, an innovation hub in Toronto. As one of Asaria’s mentors in MaRS Momentum, a program that helps high-potential ventures scale their businesses, Ensing worked closely with Tulip to fine-tune this business idea. He was impressed by the care Asaria took to make sure there was a good product-market fit, and by how he empowered his team to contribute to that process. “The number one thing about Tulip is its culture,” Ensing says. “Ali’s team makes decisions about priorities together. Ali is skilled at product design himself, but the company’s success comes from his openness to accept input from a lot of other people.”
Over the next six years, Tulip grew to become one of the largest clienteling companies in the world. By the end of 2019, things were looking good: Tulip had secured six of the top 10 luxury brands in North America as clients. It also announced a partnership with Google Cloud that would allow retailers to use the tech giant’s machine-learning capabilities to better understand their customers and identify sales opportunities.
Then, the pandemic hit.
“It became clear that stores were going to shut down. New investors were questioning how they could invest in a category that’s about to close down,” Asaria says. “There was also this huge growth phase for e-commerce. Basically, everyone started thinking we had made a big mistake by betting on stores.”
Re-tooling the business to meet clients’ changing needs
Like many businesses in those early days of the pandemic, Tulip went into survival mode.
First, the company reduced the size of its workforce by 12 per cent, a process Ensing helped Asaria navigate. Ensing and other Momentum advisors also helped the company find emergency funding—mentors in the program introduced Asaria to two sources of government funding, which literally helped save the business.
“We were so low on cash when Covid hit that I don’t think we would have survived, had it not been through the support of MaRS,” says Asaria.
Then, it was time to think about the business itself. Initially, there was no option too far-fetched for Asaria and his team to discount. They mulled moving away from luxury and into markets like groceries. But soon, they realized there was enough opportunity among Tulip’s existing customers, who trusted the company to help them navigate these uncertain times.
In fact, “business just took off during the pandemic,” Asaria says.
It was once again time to ask customers what they actually needed and figure out how to provide it. And, strangely enough, it all came back to the problems he and his team had identified in those first conversations with retailers. The software that large chains use to run their stores is often 25 or 30 years old; replacing it can be a multi-million dollar endeavor, so many just kept trying to squeeze one more year out of their existing system… until the pandemic made that option untenable.
“Covid was the tipping point,” he explains. “Retailers were asking basic questions of these systems, like: My employees are at home, can they ring through a transaction from their phone? But these 25-year-old applications weren’t designed for the internet. They had been stretching this broken system for so long, and then it broke.”
Suddenly, Tulip’s clients were ready to rethink the purpose of stores and, importantly, invest in becoming more agile. This became the tentpole of an entirely new business strategy, which Momentum helped Asaria and his team craft through a series of high-level planning sessions. Within weeks, they came up with an entirely new vision for the company, rebuilt its mission, set new goals and figured out how to flow this new strategy throughout the business.
The result was an exponentially larger product offering: a holistic, cloud-based system that incorporates clienteling, point of sale and other tools across all sales channels. In short, their software can now run an entire store.
Scaling the solution
The impact on Tulip’s bottom line has been profound. The company re-hired everyone it laid off and attracted new clients beyond luxury retailers, including Purolator and Indigo. In June 2021, it raised US$28 million in a Series C funding round led by growth equity firm Arrowroot Capital.
Ensing says much of this success can be traced back to the culture Asaria has built at Tulip. “That team is tight. They’re not afraid to challenge each other. But at the same time, there is a real sense of camaraderie,” he says. “Simon Sinek says culture eats strategy for lunch. I think Tulip is an expression of that.”
Next, the company is looking to expand its workforce, especially through savvy acquisitions of businesses in the same space. They’re also planning to expand aggressively in new markets, particularly in Asia.
“The story for Tulip is no longer just about how we prove ourselves to get in the door,” Asaria says. “It’s more about how we scale something that’s doing really well so that we can take it to the next level. It’s a whole new chapter for us. It’s exciting.”
MaRS Momentum program works with high-growth Canadian companies to accelerate their path to hitting $100 million in revenue. Is your business Canada’s next anchor company? Find out more and apply to join the program.