Category Archives: Exits

Summer’s over, but it feels a little like Spring

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Editor’s note: This is a cross post from Let the Sparks Fly! written by Mark Skapinker. It is a delightfully positive outlook on the prospects for the Canadian startup union. Mark is Cofounder and Managing Partner at Brightspark, which earlier this week was awarded CVCA’s deal of the year award.

Normally this is the time of the year that really stresses me out. It is late September in Ontario, summer is over, the leaves are starting to change colour, and while it is still pretty nice out, it’s real clear that it is downhill from here to winter, with warm days more than seven months away.

But something in the local tech industry feels a little different, and it feels like things are getting better. Some of us have been lamenting the state of the Canadian VC industry for years now, and Rim’s woes should by all rights make the local scene seem even bleaker – but people in the industry don’t seem to be listening. A whole lot of activities that are happening seem to signal an awakening spring and everyone seems just a little more optimistic.

Of note are more entrepreneurs pitching really interesting offerings. I keep meeting Canadian entrepreneurs with great ideas, great opportunities and a yearning for success.

Surrounding that are a number of exits from local companies – most notably (for the industry and especially for us at Brightspark, where we saw more than a 23X return on our investment) is the Radian6 sale to Salesforce.com. This exit proved that great, money-making businesses can be hatched in Canada with local talent, local VCs and a positive outcome for the local economy. Add to that a series of other small acquisitions along with some interesting exits.

And then there are the new micro-funds which are growing despite the stalling of the traditional industry, with experienced and talented managers helping a new series of companies – I am referring to our colleagues – Duncan and Robin at Mantella; Matt at GoldenVP; the teams at Xtreme, bnotions and Real Ventures; Daniel at Klass Capital; Bill Dinardo; and Joel at Trilogy; all who are making a very meaningful difference to our industry. MaRS is expanding, IAF is investing, I hear some traditional Canadian VCs may be finalizing new funds, and the government funds continue their part in providing capital.

We aren’t out of the woods yet, but it definitely feels like now is a great time to be part of the Internet, software, mobile, Cloud, and payment industries. Markets are growing, and these industries are creating value while the rest of the economy questions itself. If this really is a marathon, now is a great time to be heading out.

If we can keep up this momentum and deliver a few more winners, we may look back at this time as the period when the new Canadian industry started thriving.

At Brightspark, we remain thrilled with our VC fund’s performance. Our multiple exits puts our performance way ahead of top quartile funds anywhere in the world. And we think the remaining companies in our portfolio have the potential of taking our fund to new levels. Our focus on investing in great teams, markets we understand, and with an early stage fund of entrepreneurs helping entrepreneurs is paying off really well.

To those people who have written off our participation in the industry, we continue to focus on remaining a significant part of this industry, and we think the next few years could be very exciting for our funds and the Canadian industry.

Kanetix acquired by Monitor Clipper Partners

Kanetix, Canada’s first online insurance marketplace provides over a million quotes per year to consumers looking for insurance, yesterday announced it has been acquired by Monitor Clipper Partners, a Cambridge based private equity firm that manages $2B in capital.

Co-founded in 1999 by George Small and Gregory Ellis (who will retain significant stakes in Kanetix), the Toronto based company will now be led by Yousry Bissada who has joined on as CEO and Andrew Lo who has joined as Chief Information Officer.

Yousry and Andrew previously grew Filogix from $3M to $60M in revenue. Monitor Clipper Partners leveraged recapitalized of Filogix in 2004 successfully exited for $212M to Davis & Henderson in 2006. It is encouraging to see experienced repeat teams growing Canadian companies.

Here’s to a repeat performance.

 

 

Did we hit a billion?

Dr. Evil "One Billion Dollars"Today IBM just announced the $387MM acquisition of Toronto-based Algorithmics. It begs a couple of open questions. Is Algorithmics after being sold to Fitch for $174MM in 2004 still a Canadian startup? Can a 30 year old company like MKS be considered a startup? Is Eloqua who’s HQ moved to Virginia still a Canadian company?

If you imagine that Algorithmics is the second Canadian software startup acquired for more than $300MM in the past 6 months. Then to answer Dan Morel’s question,  if this was “The One Billion Dollar Year” for Canadian startup acquisitions, yes it is.  Only if you consider Algorithmics still a Canadian startup and 30 year old MKS a startup, then combined with Radian6 the acquisitions total just over $1B, everything else is icing on the proverbial cake.

Congratulations to the Algorithmics team and alumni.

Adding to the TechVibes list of Canadian Acquisitions:

1/5/2011 – Victoria’s Flock acquired by Zynga

1/6/2011 - Edmonton’s Attassa acquired by YouSendIt

1/31/2011 - Toronto’s Adenyo acquired by Motricity for $100 Million

2/8/2011 - Toronto’s MyThum acquired by OLSON

3/3/2011 - Toronto’s CoverItLive acquired by Demand Media

3/11/2011 - Vancouver’s Sayvee acquired by Bandzoogle

3/26/2011 -  Waterloo’s Tiny Hippos acquired by RIM

3/30/2011 – New Brunswick’s Radian6 acquired by Salesforce for $326 Million

4/7/2011 - Waterloo’s MKS acquired by Parametric Technology for $292 Million

4/8/2011 – Toronto’s PushLife acquired by Google for $25 Million

4/27/2011 – Montreal’s Tungle acquired by RIM

4/28/2011 – Montreal’s Coradiant acquired by BMC

5/10/2011 - Toronto’s Conversition acquired by e-Rewards

6/3/2011 – Waterloo’s PostRank acquired by Google

6/7/2011 - Toronto’s DealFrenzy acquired by Intertainment Media

7/8/2011 – Toronto’s FiveMobile acquired by Zynga

8/30/2011 – Vancouver’s Zite acquired by CNN for an estimated $25MM

9/1/2011 – Toronto’s Algorithmics acquired by IBM for $387MM