Waterloo Region isn’t just a technology cluster. It’s meeting place, a nexus for people and skills from around the world. Blend those people in the Waterloo Region pot, you cook up new ideas, fresh solutions, unique companies. It’s fusion cuisine – for technology.

And sometimes that fusion finds a home outside of Waterloo Region.

Case in point is San Francisco-based OpenPhone, which Wednesday unveiled a US$2-million seed raise and simultaneously announced an expansion of its product suite.

OpenPhone solves the problem of office communications, the one that emerged as everyone abandoned the office desk telephone in favour of their mobile device. Mobile phones add functionality and portability, but they generate a secondary problem: everybody now lends their personal number to the company they work for. For small businesses, the problem is acute. A firm’s central business number is tied to one person’s mobile. Personal calls and voicemail blend with those that are unique to the company. And only one person has authority over the number, which rings at all times of day. And night. Kinda sucks to be them.

OpenPhone is the fix. It adds a second number to a mobile device, one that can be dedicated to work and can also reside on devices owned by other team members. Its product can be used on computers as well as mobile devices and it automatically transcribes voicemail into text. Hardly a surprise, then, that the company, launched just 18 months ago, has 5,000 customers.

And it got its start here in Waterloo Region.

OpenPhone’s CEO, Mahyar Raissi, came to Canada from Iran in Grade 10. He enrolled at University of Waterloo, acquiring a software engineering degree in 2014. 

Raissi’s co-founder, Daryna Kulya, came to Canada from Kyiv, Ukraine to attend University of Windsor. She spent time with Deloitte in Toronto, and eventually settled in Kitchener, where she signed aboard as a product manager at Vidyard.

The pair met through common friends, formed a company and incubated the venture in UW’s Velocity Garage at the Tannery, from the fall of 2017 to May 2018.

Their product was promising enough that they gained a place in Y Combinator, the famous Bay Area seed accelerator whose companies are now valued north of US$155 billion. The pair exited from YC in August of 2018 and their company now has eight team members.

But without the serendipitous series of events that began once the co-founders arrived in the Waterloo area, would it even exist?

“We both feel strongly connected to the community in Waterloo [Region],” says Kulya.

“[Kitchener-Waterloo] is the place where I understood that I wanted to join the startup world. I credit the KW tech ecosystem with that pivotal moment in my life, one that changed everything.”

Wednesday’s announced investment was led by San Francisco-based Slow Ventures, and includes participation from Waterloo Region’s Garage Capital – meaning OpenPhone’s ties to the region are ongoing.

“We’re excited to support OpenPhone’s journey as an early investor,” said Garage Capital co-founder and General Partner Mike McCauley.

“We think OpenPhone’s products show immense promise and solve a problem plaguing many businesses.” 

For now, Kulya and Raissi have decided to remain in the Bay Area and grow their company there rather than Waterloo Region. As they emerged from YC, they realized they had access to an enormous market and new contacts that were good for their business.

“I think [the reason] we stayed is probably the network,” says Raissi. “We saw a community that is willing to help. Most of our investors are based here and they are always very happy to connect us to other people.

“They influence you to be more hungry and to dream bigger.”

An argument often gets made that when Waterloo Region tech talent moves to California there is a net loss to the region. McCauley said he’s not so sure that’s the case, explaining that when a company from Waterloo Region moves to the Bay Area it becomes a touchpoint, a bridge, for other local companies looking to accelerate their growth.

“We at Garage definitely see [OpenPhone moving to the Bay Area] as a positive thing,” McCauley said. “There are plenty of examples of companies going to Silicon Valley and/or doing YC, staying for a bit and then coming back,” he said, citing Vidyard and BufferBox, a company McCauley co-founded, as examples.

“Learning the Silicon Valley way of thinking, its ambition, DNA, etc., is valuable for members of our ecosystem and is an important way our region is going to get better and better.

“Even though [Kulya and Raissi] may be ‘lost’ for the moment, they are further building and reinforcing the Silicon Valley-Kitchener-Waterloo bridge. There is a good chance they may move back in the future, and in the meantime, their KW network remains and they are a powerful connection point for people currently in the KW ecosystem who are looking for advice and to gain feedback from other founders [who are] trying to build a network in Silicon Valley.”

So, OpenPhone’s co-founders didn’t come from Waterloo Region. And they didn’t remain here, either. But there’s no denying the synergistic, incubating role Waterloo Region played in their company’s development, and the role Raissi and Kulya may well play for other local companies looking for help.

Call it fusion technology – an OpenPhone call away.