Tech
One chart that will make you feel good about Canadian tech
Plus: Neo’s backers, Wealthsimple’s value, and Shopify’s concerns.
The above chart lists a selection of Canadian tech companies that have secured financing rounds of $100 million or more since 2005. That time period represents approximately $48 billion invested across more than 3,000 deals.
BetaKit deals in data daily, and it’s necessary to harden oneself lest you become buffeted by the highs and lows. But there’s something about that chart I find strangely calming.
It comes via Inovia Capital, which put together an exclusive early snapshot of its State of Canadian Software report for BetaKit so Rob Kenedi and I could discuss it onstage with Inovia CEO Chris Arsenault at SAAS NORTH. You can find a podcast of that conversation, along with the report snapshot, below.
Inovia has been around since 2007, and Arsenault brought an optimistic perspective to our conversation grounded in progress over time.
“Before 2015, you could barely count the number of hundred million dollar valued companies until Shopify’s IPO,” he said. “The top 10 largest exits were under a billion dollars in tech and when we sold Luxury Retreats for $400 million, that was the 11th-largest exit.”
“Fast forward to 2024, only in our portfolio: we have over 12 companies doing between $105 and $900 million in revenue, not in valuation. This is the Canadian landscape that has changed.”
As always, there are caveats: as we’ve discussed before, data collection between 2000-2010 was pretty bad so we might be missing a few pre-Shopify Canadian Tech Heritage Moments™; Isabelle Kirkwood and Madison McLauchlan have reporting below showing some major holes in the country’s early and growth-stage investments; Arsenault himself is concerned about Canada’s emerging manager VCs tapping out after struggling to secure new funds. Highs and lows.
Still, the above chart is a reminder that sometimes a positive perspective comes from setting a long enough time horizon to realize that things are moving up and to the right.
Douglas Soltys
Editor-in-chief
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TOP STORIES OF THE WEEK
Neo Financial’s $360-million Series D features big names, unanswered questions
Neo Financial’s Series D round, which closed last month, consists of $112 million CAD in equity and $250 million CAD in debt. The all-primary equity component, backed by a number of notable tech leaders like Shopify’s Tobi Lütke, Slack’s Stewart Butterfield, and Roblox’s David Baszucki, was smaller and came at a lower valuation than Neo’s unicorn-minting 2022 Series C round.
Unanswered questions still surround the round as the lead investor and revised valuation remain undisclosed.
Clio boosted Canadian VC investment in Q3 2024, but early-stage funding reaches “worrisome” low
Despite an uptick in Canadian venture capital investment in Q3 2024, pre-seed and seed investments have sharply declined throughout the year, which the CVCA says could spell trouble for Canada’s early-stage pipeline.
While there was a six percent increase quarter-over-quarter, and a 51 percent increase year-over-year, of venture capital investment in Q3 2024, deal volume declined by 17 percent. Vancouver-based legaltech firm Clio’s $1.24-billion CAD Series F round, which was financed entirely by American investors, accounted for 47 percent of all dollars raised in Canada during Q3 2024, according to the report.
A separate joint report from CVCA and Réseau Capital found that Québec saw a significant dip in VC in Q3 2024, continuing a multi-year trend and ranking the quarter in the bottom five of the past 10 years. On top of struggles to raise, frustration brewed in Québec this week when one of the province’s few government-run pre-seed and seed-stage investment programs was paused, seemingly overnight.
1Password alters leadership with David Faugno appointed co-CEO alongside Jeff Shiner
Toronto-based 1Password has shifted president and chief operating officer, David Faugno, to serve as co-CEO alongside longtime leader Jeff Shiner.
After serving in an advisory capacity for six years, Faugno was tapped to serve as the company’s first-ever president and COO last year to oversee scaling the company to new markets and product offerings. After securing multiple global partnerships and the launch of its Extended Access Management offering, Faugno will take on the new role with similar expectations.
As Google and Cohere expand multilingual AI offerings, experts warn of “plausible BS”
AI-powered language translation is an attractive option for companies that want to access international markets more easily. But experts say it’s unwise, and even dangerous, to rely on machine translation without professional review.
Isaac Caswell, a senior software engineer at Google Translate, told BetaKit that AI translation tools should not be used “without checking in any professional, high-stakes situations.” AI models are great at spitting out “very plausible BS,” he added.
4AG Robotics, Daanaa return to Foresight’s 50 “most investible” cleantech ventures list in 2024
Foresight Canada has highlighted the 50 cleantech ventures it dubs Canada’s “most investible” in the fourth rendition of its annual Foresight 50 list.
Foresight, a Port Coquitlam, BC-based cleantech accelerator, said that companies on the list are selected by a panel of cleantech investors who evaluate the investability, potential economic impact, leadership team, environmental impact, and probability of success. The list featured multiple returnees from years past, including 4AG Robotics, Daanaa, and Brickeye.
Scaling infrastructure for a market that never sleeps
The crypto market has faced accelerating momentum this year. Regulators are providing clearer guidelines, traditional financial institutions are entering the space with urgency, and the demand for digital assets shows no signs of slowing.
But behind the scenes, FinTech startups and financial services companies offering crypto need robust systems that can handle the speed, scale, and security of a market that never sleeps.
That’s where Aquanow comes in.
Mastercard and VoPay help empower a cross-border economy
Technology has dramatically changed how and where people work, creating a global economy and workforce. From gig workers to remote offices, companies are increasingly faced with payment challenges that span across borders, requiring them to provide quick and seamless money transfers to a variety of locations and banking environments.
The shift prompted Hamed Arbabi to found VoPay, an API-driven fintech-as-a-service platform launched in 2016 to simplify the complexity of offering local payment methods globally.
“We understand the challenge of how money moves,” Arbabi said.
Through its partnership with Mastercard, VoPay now offers its customers a one-stop source for cross-border and domestic transactions, making global money transfers easier.
Toronto’s rising tech stars have one big thing in common: they worked at Uber
Some of Toronto tech’s most ambitious leaders share a common trait in their LinkedIn profiles: working experience at Uber Canada.
Uber’s Canadian outpost has spun out the likes of Rob Khazzam, co-founder of Float; Kelly Kwan, general counsel at GoBolt; Andrew Tiffin, chief of staff to the CRO of Shopify; and Rachel Wong, co-founder of Monday Girl.
There, they learned in an environment of rapid growth, constant product development and complex realities, all while keeping pace with a rapidly changing market that required a rare blend of savvy and stamina.
Today, Uber Canada’s veterans are channelling those skills into the local ventures that are shaping the city’s tech ecosystem.
BETAKIT’S WEEKLY ROUNDUP
RCH – UniUni secures $42.2M CAD in Series C financing
VAN – Pender Ventures closes over $100M CAD for second fund
MB – Manitoba launches department focused on innovation and technology
KW – RunQL secures $1.6M CAD pre-seed round
KW – University of Waterloo-linked incubator Velocity moves into new hub
TOR – Richa Mehta joins Radical Ventures as San Francisco partner
TOR – Wealthsimple gets valuation bump from Power Corporation
OTT – Shopify posts strong Q3 earnings
MTL – Nuvei posts revenue growth in final earnings
MTL – Trolley closes $32M CAD Series B round
QCY – GPHY raises $5M CAD seed round
The BetaKit Podcast
The state of Canadian software in 2024
“Canada is hitting above its weight. It doesn’t always feel like that.”
Inovia Capital CEO Chris Arsenault joins to share data and a long-term perspective on the state of the Canadian software industry in 2024, recorded live on the BetaKit Keynote State at SAAS NORTH.
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This week: Neo’s backers, Wealthsimple’s value, and Shopify’s concerns.
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