Convictional to Shut Down After Failed AI Pivot
AI-generated image · Bay Street Wire
The B2B startup will return remaining venture capital to investors after failing to find product-market fit for its corporate collaboration platform.
Kitchener-Waterloo-based Convictional will permanently shut down on Aug. 27, as BetaKit first reported. The decision comes after the startup attempted to pivot from its original e-commerce focus to build a corporate collaboration platform designed as an alternative to Slack for the AI era.
Co-founder and CEO Roger Kirkness told BetaKit that the company failed to secure enough paying customers to build a viable business, noting that larger firms were developing their own in-house solutions while smaller companies presented a "sustainable distribution" problem. Kirkness stated that customers appeared satisfied with the status quo, concluding that the company was chasing product-market fit in a space where the desired product was either being built internally by others or could not be sold profitably.
Prior to this pivot, Convictional operated a tool for dropship partnerships branded as Modern Dropship. According to BetaKit, that arm of the business generated $2 million USD in net annualized revenue and $83 million in gross merchandise volume (GMV) across 3,000 customers before Convictional divested the unit to California-based competitor Carro in early 2025. Former president Chris Grouchy noted that while the software still handles meaningful volume, Kirkness acknowledged the company lost a significant amount of the capital spent to build and sell that platform.
Convictional raised nearly $49 million USD ($68 million CAD) in venture capital from investors including Garage Capital and Y Combinator (YC)’s growth fund. Because the company still has several years of runway, Kirkness plans to return slightly less than half of that funding to investors.