Category Archives: Mergers & Acquisitions

Bufferbox Acquired

Waterloo shining star startup, Bufferbox, just announced that it was acquired by Google today for an undisclosed sum. Whaaaa?

Bufferbox is a Waterloo startup that builds locker-like boxes that enable consumers to mail their ecommerce orders to a convenient location where they can pick them up without having to worry about missed deliveries. Recently Amazon announced a similar service just for Amazon orders in the US, and similar ideas have taken off in Europe.

The growth of Bufferbox under the leadership of Mike “Matt Damon” McCauley, Aditya Bali, Jay Shah quickly became an example of how to “do startup” in Canada.

Bufferbox only started up in 2011 and won the Waterloo VeloCity Venture Fund in February 2012. They were prominent favourites of Paul Graham when they went through the YCombinator program in Silicon Valley. Bufferbox currently occupies a chunk of space in the VelocityGarage inside the Communitech Hub.

I remember when Mike and the rest of the team first stated they were building a startup around bulky hardware that wasn’t easily patentable, people said that they were crazy. Bufferbox started in an incubator surrounded by teams trying to make the next trendy social/mobile app – they stood out for wanting to do something physical and different (and a little bit crazy).

Mike was properly introduced to me just before Christmas in 2011. The person who introduced me basically said “This kid is trying to build something that is too audacious to ever really take off, but he’s a nice guy so you should give him advice.” In early 2012, the Canadian startup community reacted in a similar way: by all accounts, Bufferbox was in for a really difficult ride getting their idea funded so they could build and deploy more expensive boxes. People said that it was too hard to build a hardware startup these days. More than one person told them to give up.

But they didn’t.

Greatness is defined by how entrepreneurs act in the face of challenge, and this team reacted by working twice as hard and always smiling and being charming the whole way through. This attitude made them darlings of the YC Program which, rumor has it, they applied to last minute on a whim.

If you are to learn anything from the story of Bufferbox it is:

  • Never give up, and keep smiling
  • The first response to all audacious ideas is: “this is too crazy to work”
  • Harness the power of Silicon Valley while building in Canada (aka – get into YC)
  • Only the craziest, boldest ideas are rewarded with crazy, bold success
  • Always look like Matt Damon

Bufferbox’s story, like the other Waterloo (not-yet-acquired) startup darling, VidYard, demonstrates what’s going right in Waterloo and Canada in general. Bufferbox made use of Velocity and the VelocityGarage combined with Communitech’s mentoring power to successfully seed their company built on the engineering talent from the University of Waterloo. Silicon Valley noticed. Montreal VC, iNovia, swooped in to invest early. When Amazon launched a comparable product in the US, Bufferbox used that announcement to build more excitement around the category – alternate ecommerce delivery models went from cool to hot in a matter of months. All the pieces lined up. In the end, the Bufferbox team demonstrated what happens when awesome, charming entrepreneur engineers work hard in a hot space.

Even though the size of the deal was undisclosed, from the stories overheard in the halls of Communitech, there was massive competition from literally the best names in Silicon Valley to get Bufferbox and so we have an inkling that the Bufferbox team did very well for themselves in this deal. With that in mind, Mike McCauley needs your help in the comments below with suggestions for sports cars he should buy to replace the BufferBenz.


2011: Glass Half-Full or Half-Empty for Canadian VC?

Editor’s note: This is a cross post from Mark Evans Tech written by Mark Evans of ME Consulting. Follow him on Twitter @markevans or This post was originally published in February 14, 2012 on

CC-BY Some rights reserved by waferboard
Attribution Some rights reserved by waferboard

First, the good news about Canada’s venture capital landscape. In 2011, investment activity climbed to the highest level in four years ($1.5-billion), a 34% increase from 2010, although it is still significantly below the record activity ($2.1-billion) reached in 2007.

The bad news is there’s still not enough supply to meet rising demand, plagued by “continued weakness” when it comes to fund-raising.

The good news-bad news scenario was spelled out in the Canadian Venture Capital Association’s annual report. For those of us in the glass half-full camp, the increase in investment and the number of deal is cause for optimism.

As well, 2011 saw a spike in M&A activity with 34 deals, including two each by Google, Facebook, Zynga and And there was a flurry of incubators and accelerators established, including Extreme Startups last week.

Before anyone gets carried away, Canada’s venture capital landscape is a long, long way from being solid, let alone robust. There’s still not enough venture capital for seed, series A or major rounds. And don’t expect U.S. investors to pick up the slack.

In a press release, CVCA president Gregory Smith said there is concern about whether enough fund-raising can be dong to support the demand for investments. This situation was illustrated by the fact new commitments to Canadian VCs were flat last year at $1-billion.

“Canada has a historic opportunity to become an innovation leader,” Smith said, adding that “in order to act decisively on this opportunity, we must first overcome challenges to supplying VC funds that, in turn, supply entrepreneurs.”

So what’s the solution? How can Canada’s venture capital community do a better job of supporting the startup community? There is not easy answer to a problem that has been around a long time and doesn’t look to be changing any time soon. It’s not going to be an easy fix from government or U.S. investors or institutional investors waking up to the idea of venture capital investing.

Perhaps the answer to the problem is this: success. If more startups and mature high-tech companies are acquired, that could (emphasis on “could”) encourage investors (angels, VCs and institutional) to get more involved. Success has a strange way of helping people to see the light or new opportunities that they otherwise would have dismissed or not seriously considered.

That said, success is a double-edged sword. Without enough financial support, it is hard for startups to have enough powder to become acquisition targets. If they’re not interesting targets, there’s no acquisitions and, likely, less interest from investors.

So which side of the fence do you sit on? Are you bull or a bear about Canada’s VC landscape?

Editor’s note: This is a cross post from Mark Evans Tech written by Mark Evans of ME Consulting. Follow him on Twitter @markevans or This post was originally published in February 14, 2012 on

The Untold Story of Kobo

So I read most of the news this morning around Kobo and the links being passed around. Generally I was miffed. When folks in the startup scene complain about media doing a lame job covering entrepreneurial stories, this is a great example. The story being published in the media is “Indigo sells Kobo”, “Indigo builds Kobo”, etc, etc. All Indigo, all the time. Probably due to PR agencies spinning the story that way, and also due to lazy business journalism. Well, having chatted with a bunch of folks involved with Kobo, I have a different take on the Kobo story:

Mike Serbinis

If you are in the startup scene in Toronto and you have not heard of Mike Serbinis – shame on you. He is another example of an amazing entrepreneur in the community who has been wildly successful. The first company he started, DocSpace, was an internet leader in security. He founded it in 1997, and went on to sell it to CriticalPath in 1999, for whom he was CTO and EVP marketing for some time. Throw in a master’s in engineering, a few patents, and you can see why folks were pretty excited about his return to Canada, joining Indigo in 2006.

The Indigo/Shortcovers/Kobo story is as such. In 2007, 2008 Serbinis starts lobbying Indigo about the coming sea of change called “ebooks”.

In April of 2008, Shortcovers is created within Indigo. Shortcovers is an online ebook store and mobile app meant to work across the plethora of new smarter devices – Apple, Android, BlackBerry, Palm, etc. Access to books on any device.

This date is important, April 2008. If you think this is just another dumb Canadian “me-too” play, you should look up the launch date of the Kindle. The Kindle launched in November of 2007. And Amazon blew the Kindle launch, and had no stock available until April of 2008. Every attempt before April of 2008 at ebook readers and online ebook stores had been nothing short of disasters, ripe with lost capital. Let me double down on this point:

ebook Sales 2007-2010

In 2007 and early 2008 it was NOT obvious that ebooks would be a big factor, and that Indigo should meaningfully go after the ebook space.

So Mike Serbinis, within Indigo, stared at this in 2007/2008 and said “Indigo should enter the ebook space”. Wow – those are some big brass entrepreneurial balls.

So they create Shortcovers. Shortcovers name was from their original “gimmick” in that they let folks buy books a chapter at a time. Shortcovers was a pure ebook store & software client. No hardware. They were originally intending to put their ebook app on as many devices as possible. No hardware. So somewhere in 2009, things change.

Kobo is Created

Serbinis then goes on to do the unthinkable. At some point in 2009, he see’s the only way for Shortcovers to get critical mass adoption is to launch its own hardware. Whattt????

Shortcovers is a software company. Serbinis is a software exec – CIO & EVP Online at Indigo. Indigo is a brick and mortar retailer. They have ZERO hardware background. That’s a big-ass, high-risk pivot folks!!

So he goes off with his “lets build a device” vision and convinces Indigo to spin them off into their own business, but also gets Indigo to cough up another $5mm as part of a $16mm round where he gets Borders, RedGroup & one of the most famous Asian investment firms around – Cheung Kong Holding.

In early-mid 2009, it probably looked like launching a new ebook reader was a good idea. By the end of 2009 though, everybody and their sister was launching a new ebook reader. Check out this article: Everybody I know who went to that CES said “maannnn, so many ebook readers”.

I remember talking to Dan Leibu, CTO of Kobo, who in early 2010 was nervous as hell about launching their own device. He said something to the effect of “if we had known so many ebook readers were going to launch, we probably wouldn’t have launched our own”.

Kobo launched in July 2010, well after many of the above devices were in market. How did they do? The rumour on the street is that Kobo cracked $100mm in sales in its first 12 months. $100mm in revenue in its FIRST YEAR!!! They only raised $16mm in their A round and built a $100mm revenue company in 12 months. That is simply unbelievable. How about you other startups, have you done 10X your initial investment in revenue yet?

And how did the rest of the industry do? Anybody know where the Skiff Reader, the Plastic Logic Queue, the Alex Reader, and so on and so forth ended up? Probably not with $100mm in sales and a $315mm acquisition.

And that my friends is why I’m miffed at the coverage on Kobo. This is a wild and crazy story entrepreneurial story full of big risky moves. Its a story of an entrepreneur doing things that only great entrepreneurs can do – even making elephants dance. And its a rare story in Canada, and as such a story that deserves proper coverage.