Oh, Canada. Land of the increasingly common narwhal and home to what has been called “best up-and-coming startup ecosystem in the world.” Looking back at the Canadian startup landscape over the past year and a half, 2015 and 2016 have marked some pretty incredible milestones for our venture-backed friends.
The Canadian Venture Capital and Private Equity Association reported record high VC investment, totalling $838 million across 118 deals in Q1 of 2016 — nearly double that of 2015.
And, of course, we would be remiss not to acknowledge some of the incredible accomplishments of individual companies, such as Shopify, whose IPO rocked the Canadian startup world in May of 2015, followed shortly thereafter by Vancouver-based Mogo. Or Kik, the Waterloo company that joined the unicorn (or if you prefer, narwhal) club just two months later. Also noteworthy was the Burnaby, BC company D-Wave, whose proprietary “quantum computer” was purchased in partnership with Google by NASA in 2013 and debuted in late 2015.
All this said, we want to celebrate not just the heavy hitters, but the startups across the country who make us question whether “the true north strong and free” doesn’t refer to our coffee and wifi.
We present to you: The State of Canada’s Startup Nation.
Who Raised
Nearly everyone, it seems. While we know that isn’t exactly true, we’re happy to admit we didn’t know where to start when reporting on startups who raised VC rounds in 2015 and so far in 2016. But it’s a good problem to have. The Canadian Venture Capital and Private Equity Association reported 654 VC deals between January 1, 2015 and March 31, 2016 totaling $3.2 billion in investment. Since we can’t mention them all, here are some of the highlights from each category:
Seed Rounds
As far as we can tell, the largest Canadian seed round of 2015-2016 was that of Red Peach Gifts, who accepted a whopping $10 million from Quest Ventures LP in October 2015. Having said this, the inventory and sales solutions company has been surprisingly quiet since.
Also based in Toronto, LimeLight Platform came in with a strong $3.1 million seed round. The company, who transitioned from providing a traditional service to SaaS before securing the funding in early 2016, has built a product that allows its enterprise-sized customers to develop and execute marketing campaigns on demand.
We imagine the founders of LemonStand have heard their fair share of “when life gives you lemons” jokes since it closed a $1.25 million seed round earlier this year. Cheesy adages aside, the Vancouver-based e-commerce platform plans to use its newly raised cash to continue product development and add new suppliers to its roster.
Meanwhile on the opposite coast, Halifax’s Spring Loaded Technology secured a healthy $1.9 million in seed funding, as well as a $1 million government contract. The Canadian Department of National Defence sprung (again, we’re probably not the first to that pun,) at an opportunity to equip Canadian soldiers with Spring Loaded’s proprietary bionic knee brace known as the Levitation™.
Other honourable mentions include:
- Showbie, who raised $2.3 million on April 7, 2015
- SoapBox, who raised $3 million on October 15, 2015
- Wiivv, who raised $3.5 million on December 3, 2015
- ChangeIt, who raised $2.2 million on February 29, 2016
- Permission Click, who raised $1.75 million on March 28, 2016
- CyberPost, who raised $1.8 million on March 30, 2016
- Revlo, who raised $1.21 million on May 11, 2016
Series A
Montreal’s BlockStream raised $55 million this past February in hopes of reshaping the financial services industry making it the largest seed round of the year.
The next largest series A round (a not-too-shabby $38 million) was raised by Benevity, who reportedly doubled in size between 2014 and 2015. Toronto-based WealthSimple, who made mainstream news in 2014 for its record fast $1.9 million seed round, and Cymax, a home and office furniture e-commerce company from Burnaby, also secured $30 million in the past 18 months.
Other honourable mentions include:
- ClearPath Robotics, $14 million, raised March 18, 2015
- Precision Nanosystems, $13.4 million, raised September 29, 2015
- Qvella, $20 million, raised October 29, 2015
- Progressa, $11.4 million, raised December 1, 2015
- FreshGrade, $11.6 million, raised May 10, 2016
Series B
Clover, the Toronto-born dating app that has been described as Tinder meets OKCupid, closed its series B round with a $35 million round last December. Around the same time Clover announced plans to host mixers, leading some to, instead, compare it to a marriage of Meetup and Reddit. (Last dating pun, we promise.) The jury’s still out on exactly how successful these mixers have been in creating long-term relationships, but at the very least they can make for a good laugh.
With the promise of an improved transportation experience for everyone, we’re secretly rooting for Miovision and their traffic data platform. The Kitchener-based startup was among the top series B raising companies of 2015-2016, securing a $30 million round led by MacKinnon, Bennett & Co. in early 2015. Miovision has since announced partnerships with other Waterloo startups Ecopia Technologies and Brisk Synergies, as well as Swift Labs whose engineers will help further product development.
Having raised a $6 million series A round the year prior, Breather, Montreal’s on-demand workspace provider has been at it again. The company, who has built a network of private office spaces through commercial lease and partnerships with hotels and small businesses, raised an additional $20 million to close a series B round in September of 2015.
Other honourable mentions:
- Bit Stew, $17.2 million, raised May 13, 2015
- Eventbase, $8 million, raised December 8, 2015
- Orckestra, $12 million, raised December 10, 2015
- MMB Networks, $7 million, raised January 8, 2016
- Vidyard, $18 million, raised January 14, 2016
- Bench, $20 million, raised May 3, 2016
Series C
Leading the pack with the most amount raised of series C “closers” was Lightspeed Retail, a cloud-based point-of-sale system that raised $61 million from Caisse de dépôt et placement du Québec (CDPQ) and Investissement Québec (IQ). The deal, made in September of 2015, was at that time the top venture capital deal of the year.
If you were reading the Series B section and thought “Hey, what about Vidyard?!” don’t worry, we they weren’t forgotten. We thought we’d give them the props they deserve for closing not one, but two rounds (for a grand total of $53 million in the past 18 months) by instead recognizing their $35 million series C round, announced January 26, 2016. The Kitchener-Waterloo company who helps marketers glean insights on ROI from videos will use the funds to provide customers with more in-depth video analytics.
Another Canadian startup allstar, Toronto’s Wave, secured a total of $22.1 million for their series C round back in March. Along with the announcement came news that the accounting software loved by small businesses nationwide will be branching into the lending space over the course of the next year.
Other honourable mentions:
- SecureKey, $19 million, raised February 25, 2015
- Coho Data, $30 million, raised May 20, 2015
- Yesware, $13.3 million, raised June 11, 2015
- Diablo Technologies, $19 million, raised January 15, 2015
- Peraso, $20 million, raised April 21, 2016
Series D
First there’s Kik, Canada’s newest unicorn. The Waterloo-born messaging app reached a $1 billion valuation after receiving $50 million from partner Tencent, China’s largest internet company in August of 2015.
After being named a “visionary leader” by Gartner’s Magic Quadrant for Enterprise Search for the second consecutive year and experiencing record growth, it’s no wonder Q Venture Capital, along with a slew of other investors, committed $35 million to Coveo. The Quebec City startup, who offers businesses intelligent search platforms, has seen doubling year-over-year revenue growth.
Toronto-based ScribbleLive also had a busy year and half, closing its series D with $35 million and acquiring Appinions and Visual.ly in April 2015 and January 2016, respectively. Execs at the digital content marketing company attribute their fundraising success to the need for an alternative to ad-based marketing in an age of ad-blocking software.
Then there was Real Matters, a real estate information provider that closed somewhere just over $70-million entirely from Canadian institutional investors (like BMO, Infor Financial Group Inc.). A rarity to have a private company at that stage to have purely financed itself through common equity. This was the largest venture deal in Canada since Lightspeed Retail's $79.5-million venture capital financing last September.
Who Was Acquired
Betakit reported 77 Canadian startups were either acquired or performed an acquisition since January 2015. Here’s a taste of the kind of movement and mergers taking place:
Waterloo startup Pout, the photo-sharing platform for fashion enthusiasts that landed itself a title prize in the Velocity Winter Fund Finals last March, was acquired by Everalbum earlier this year. While founders Laura Smith and Riley Donelson joined Everalbum, they didn’t have far to go. The San Fran-based photo management app opened an office in Waterloo just months prior.
Meanwhile Canadian-made, San Fran-based Appdirect was busy acquiring one Canadian startup after another. Though it’s most recent gain was Montreal’s Radialpoint, Appdirect also acquired Ottawa’s jBilling and Calgary’s App-Carousel in the past 18 months.
Influitive acquired both Triggerfox and Ironark Software within a month of one another, more than doubling their team of mobile talent.
Similarly, tuition payment platform ScholarFX was acquired by Boston’s Flywire.
Other honourable mentions:
- Shopify acquired San Francisco-based virtual marketing assistant Kit
- San Francisco-based Udemy acquired Vancouver’s TalentBuddy
- Hamilton-based CareKit Health was acquired by Vancouver-based Moseda Technologies
- Montreal-based Zikera and their Groove Music App were acquired by Microsoft
- PetalMD acquired Montreal-based startup Medago
- Waterloo-based flight software company Navtech was acquired by Airbus
- Vancouver’s Contractually was acquired by Coupa
- Toronto’s fashion startup Blynk was acquired by Kik
- Germany’s Foodora acquired Toronto startup Hurrier
Who Scaled Back
While the past year and a half has been tough for our neighbours south of the border, Canadian startups seem to have held on to more talent than their American counterparts. While US-based startups Twitter, Snapchat, Groupon, Jawbone, Living Social and Mixpanel (to name a few) all downsized in the past year and a half, you’d be hard pressed to find as many Canadian startups that did the same.
While it pales in comparison to startups like Zenefits, who let go of 250 employees this past February, VarageSale had the largest Canadian layoff at 26 employees, including several C-level execs. The startup responsible for millions of virtual yard-salers across 2,000 communities around the world announced the cutbacks on January 28th, 2016 — the company’s fourth birthday. Surprising, perhaps, as the last time VarageSale was last in the news for closing a $34 million Series B in April of 2015. But having shown no other signs of slowing down, we’re not ready to remove VarageSale from our list of Canadian startup darlings anytime soon.
Close behind VarageSale when it came to downsizing was another Canadian superstar. Vancouver-based Hootsuite, rumoured to be on the verge of an IPO, let go of 20 staff in December of last year. While there was speculation that the timing was not coincidental, Hootsuite reps were quick to clarify that the layoffs were an effort to create “a simpler, more aligned business that is purpose-built.” and to support better cash flow. Fidelity Investments, the leading investor in Hootsuite’s 2014 $60M raise, cut the value of its stake in the company by 18 per cent (considered a ‘periodical readjustment’ of its private stock holding.) While Hootsuite was otherwise fairly close-mouthed about the move, outside analysts agreed that an initial public offering was likely a year or so away, and pointed out that losing 20 of its 700 employees shouldn’t have raised any eyebrows.
Who Called It Quits
Despite our best efforts, we happily admit to finding very few VC funded startups who closed their doors since January 2015. While these less-than-exciting announcements often fly under the media’s radar, we are pleased to report that most struggling startups with previous funding seem to have been absorbed by larger industry peers, as indicated by the many acquisitions listed above.
There were a few notable shutdowns, however, including PasswordBox, who announced in 2015 that it would discontinue development and support for its app and focus on the jointly-developed True Key with acquirer Intel Security. Likewise Payso, the peer-to-peer payment service that called Vancouver home, announced in April 2016 that they had begun winding down their consumer product in order to focus on further developing their app for banks and credit unions.
Who To Watch for in 2016
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We’ve been hearing for months now that Internet of Things is among the hottest of tech trends right now, so it’s no surprise Eigen Innovations has made our “startups to watch” list. The Fredericton-based company helps manufacturers quickly identify and overcome production challenges to improve things like energy usage and quality control. In the past 18 months not only has Eigen Innovations raised $1.4 million in equity financing, but it was the sole Canadian company to finish in the top six of the 2015 CISCO Innovation Grand Challenge, and came 3rd, taking home $25,000 in prize money.
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Also on our radar is Bridgit, a construction software company owned by two female trailblazers from Kitchener who won the top prize at Google’s Entrepreneurs Demo Day for Women in San Francisco last year. Given this and their impressive $1.7 million seed round, we have no doubt that Bridgit will be one to watch over the months to come as they provide residential and commercial contractors with the tools they need to achieve a smooth build.
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Another startup making waves (and mainstream Canadian news) over the past year and a half is Shoes.com — which, not surprisingly, is an ecommerce site specializing in footwear (and, we should note, apparel.) The company has been preparing for an IPO since early 2015 and we’re sure it’s still on their radar — especially after receiving $45 million in private equity funding the same year.
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What does a disruptor look like? According to Pricewaterhouse Cooper’s, Manitoba agtech company Farmers Edge. The startup received PWC’s top Vision to Reality award in the “disruptor” category for 2016. That, along with $41 million in series C funding secured earlier this year lead us to believe Farmers Edge might in fact have a competitive edge.
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What’s one way of knowing an early-stage startup is going places? When fellow startups invest in it. As is the case for Moncton-based Qimple, a hiring platform that secured funding not only from angel investor and CareGuide executive Brian Sharwood, but from CareGuide at the company-level earlier this year. While the terms of the deal were not disclosed, founders of both Qimple and CareGuide expressed that the deal was mutually beneficial. In the words of CareGuide CEO John Philip Green, Qimple is “growing quickly” and “has little trouble raising money.”
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Vancouver’s Unbounce was also in the news several times in the past year and a half, most notably for its acquisition of Rooster Engagement Tools in June of 2015, as well as for hosting the first ever TechVancouver Meetup at its office in early 2016. The landing page tool has earned a reputation for saving companies time by enabling marketers to build and test mobile responsive landing pages without bothering their counterparts in IT.
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Our ears perked up last year when rumours began that Vision Critical, a cloud-based customer intelligence platform based out of Vancouver, had hired BMO to help them prepare for an upcoming IPO. Sure enough, in light of selling its North American Research Consulting division, CEO Scott Miller acknowledged the possibility of an IPO sometime in 2016. While the deal with MARU Group was mainly to allow Vision Critical to focused on its primary offering — an internet-based subscription software service — the startup’s chairman Ian Giffen was quoted as saying “I don’t believe we could go public if we hadn’t sold this business.”
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Wiivv Wearables, who raised a $3.5 million seed round in December of 2015 also deserves a shout out for their record-breaking Kickstarter campaign. Not only did they have most funded 3D printed product in Kickstarter history, but they met their goal of $50,000 in two days, and finished the campaign at 470 percent of their goal. If that’s not impressive enough, Wiivv co-founder Louis-Victor Jadvaji was named one of Canadian Forbes’ Top 30 under 30 before the campaign had even ended. When asked about plans for scaling, Jadvaji pointed to new brand partnerships that will increase production and distribution, as well as an announcement (coming this summer!) that will “turn the world on its head.”
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With $2.3 million in seed funding, two million users and a second place finish in the “Canada’s Top Startup” competition at Metabridge, we’d be amiss not to mention Showbie. The Edmonton startup that allows teachers, students and parents to manage assignments collaboratively is helping improve transparency and efficiency within education systems — a goal we can definitely get behind.
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It’s been an eventful 18 months for investment platform Wealthsimple, who secured a $30 million series A round in early 2015 before rebranding to focus specifically on a new target audience: millennials. Wealthsimple then acquired Canadian automated investment manager ShareOwner in December of last year, and has since partnered with fellow Toronto startup Borrowell and launched responsible investment portfolios — all in a matter of months. We’re tired just writing about it!
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Another Toronto startup with big dreams — product database Hubba — made significant announcements over the past year and a half. After raising an $11.2 million series A round in October of 2015, reports followed that it was on track to raise $45 million early this year. While word hasn’t yet come that they’ve secured that funding, the Hubba Discovery Network, which allows brands to showcase their products to distributors, influencers and media, last reported 10,000 companies listing hundreds of thousands of products — an impressive milestone in itself.
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While we’re happy for fast-growing Figure 1, it’s one social media platform we don’t want our pictures on! The photo-sharing app for medical professionals closed a $9 million series A round in 2015 and has doubled its users in recent months; over one million healthcare professionals on the platform have now viewed a combined 1.5 billion cases. The most recent update? A messaging feature called “paging” that allows users to get feedback and advice from colleagues around the world.
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On the list of “startup offices we’d like to visit”, Crew’s Montreal digs are definitely up there. The service marketplace that connects clients with high quality designers and developers secured the former Royal Bank of Canada headquarters (can you say #vintage) and plan to create an office that physically embodies the virtual essence of Crew through a co-working space and public café. And why not? The young startup closed a $10 million series A round last summer.
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Over in our nation’s capital, “business dashboards” creator Klipfolio is putting its new $6.2 million series A round to use with the aim of making is faster, easier and more affordable for businesses to track data from their social media platforms, CRM, and analytics software. Considering the substantial growth Klipfolio saw in 2015, we have no doubt they’ll continue to do just that.
Needless to say it has been an eventful year and a half for Canadian startups. From IPOs to multi-round raises, we’re proud to report primarily positive news from coast to coast and look forward to serving Canadian startups for years to come.
The post The State of the Canadian Startup Nation appeared first on Onboardly.
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