StartupNorth

Category: Exits

  • PostRank acquired by Google

    Ilya has confirmed today that PostRank has been acquired by Google.

    The launch of AideRSS, the precursor to PostRank, was one of the first things we covered here on Startupnorth, so we are happy to see such a great outcome for the team.

    Google acquires Postrank

    We are extremely excited to join Google. We believe there is simply no better company on the web today that both understands the value of the engagement data we have been focusing on, and has the platform and reach to bring its benefits to the untold millions of daily, active Internet users. Stay tuned, we’ll be sure to share details on our progress in the coming months!

    Of course, we wouldn’t be where we are today if it wasn’t for all the help, feedback, and support we’ve received from our community over the past four years—thank you all, you know who you are, and we truly couldn’t have done it without you!

    Ilya also notes that the team will be moving to Mountain View as part of this acquisition.

  • Clark Kent works at CPPIB


    AttributionNoncommercialNo Derivative Works Some rights reserved photo by Greenog

    By now you have heard Microsoft is purchasing Skype for $8.5B, a company which was spun out from eBay in 2009 for $2.75B. In 18 months nearly $6B of value was created for investors, many of whom are Canadian pensioners. Faster than a speeding bullet, a courageous $300M investment in Skype has turned into nearly $1.1B. I for one would like to know who to thank at CPPIB.

    This is not an apples to apples comparison, but the Skype investment tops the results of every fund CPPIB has invested in. If one factored in IRR this deal would blow everyone out of the water. Other Canadian pension funds are ramping up venture funds (e.g. INKEF). Wonderful news given the paucity of capital available in the Canadian ecosystem, however I would argue that Silver Lake, Andreessen Horowitz, and Index Ventures were important stakeholders – so perhaps what we’re really looking at is the Fantastic Four. It follows that Canadian LPs should concurrently invest into independent funds who will source opportunities and ensure alignment with entrepreneurs.

    CPPIB Returns

  • Natural Resources


    AttributionNoncommercial Some rights reserved photo by Chealion

    Ask a miner “What is Canada’s most precious natural resource?” and you’ll be sure to stump. The answer is easy… Canadians.

    One of the tricks to Silicon Valley’s winning streak is that they back not only repeat entrepreneurs, but repeat teams. Just like one of those wonderful chocolate fountains you occasionally fortune upon at weddings, Silicon Valley recycles people. A team forms, builds a successful enterprise, people move on to try some new things, and projects that find traction attract back the core crew.

    Is Canada effectively recycling people? Think long and hard, because if we aren’t the fountain is drying up – end of the party. I can name a handful who have ventured abroad and returned: John Green (@johnphilipgreen), Malgosia Green (@HeyGosia), Dan Morel (@dpmorel), Farhan Thawar (@fnthawar), David Crow (@davidcrow), Jeese Rasch, Zak Homuth (@zakhomuth)… the list goes on, but it could be longer. Maybe our friend Howard Lindzon (@howardlindzon) will start his next company in Canada?

    What is bringing them back? Visa issues, sometimes. Spouses, more often. Schools for children, okay I’ll take it. But it would be much better if what brought our best and brightest home was opportunity. And the crazy part is, it is knocking. We have a safe multicultural inclusive country, close to major markets, with investment matching funds up the wazoo, and here is the most beautiful part – our nation is brimming with high caliber engineers (who are getting scooped up by Twitter, Facebook, and Google as you read this post).

    Part of the challenge is funding. Canadian entrepreneurs are picking up and moving to New York, San Francisco, Boston, Boulder, and even Santiago (yes you read that right, Chile – in the southern hemisphere) for minuscule sums of seed financing so they can focus 100% on their startups vs their day jobs. Just ask Ken Seville (@civisidedotcom).

    Myopic policies might attempt to discourage cross border exits, which are vital and create deep new linkages. Instead what we need to learn is that the opportunity is keeping the founders engaged once they head for warmer climates. I can guarantee, foreign direct investment will not thrive in the absence of results. To generate returns we need to recycle teams.

    I am particularly excited about a handful of intiatives that address this gap including: Toronto Homecoming, C100, and Startup Visa. Let’s find ways to support their efforts.

  • The Next 10 Years…

    Editor’s note: This is a guest post by serial entrepreneur and investor Howard Lindzon of StockTwits andSocialLeverage. He was born and raised in Toronto and has a soft spot for his hometown and Canadian entrepreneurs.  You can find this post on Howard’s blog and to stay up to date you can follow him on Twitter @howardlindzon or StockTwits @howardlindzon.

    Nobody knows!

    Nobody knows what the next 10 minutes will be like, let alone the next 10 years.

    It used to be no one cared what the next 10 minutes were going to be like. Twitter has changed that for good at this point.

    What we can do is look back for patterns and try to project them into the future or as we do in the stock market all day, spot patterns that are upon us or emerging.

    It’s a fantastic business to be in.

    William Quigley has a really good post up hypothesizing on the next 10 years in web, tech and VC land. Here is some meat:

    Let’s also keep in mind that public companies are generally a lot less risky than private ones. Less work and lower risk. That is how it used to be for public shareholders, but that era has ended for good. Let me give you some perspective on how much things have changed since the last tech cycle.

    Amazon.com, the world’s largest Internet retailer, went public at a $440 million valuation. Hard to believe, isn’t it? A company worth $90 billion today was worth just over $400 million when it went public in 1997. That skimpy valuation represented less than one times its forward 12 months of revenues, a multiple more closely associated with a corrugated cardboard manufacturer than the most important innovator in retailing in the past 100 years.

    eBay went public at a $650 million valuation, representing less than three times its forward revenues. Amazingly, this valuation was considered adequate even though at the time of its IPO, eBay had already established itself as the pre-eminent auction site on the web. Go back to the earlier part of the 1990s, and it gets even more extreme. Cisco, the most important company in computer networking infrastructure, went public at $225 million, a valuation representing just over one time its annual revenues.

    William is talking my book so I totally agree but I always have one foot out the door. I have been called to task often over my years managing money for being too risk averse.

    I consider myself ‘liquidity averse‘. I don’t mind paying up for the highest momentum public companies for the liquidity they provide and I won’t pay up for start-ups for the liquidity denied. I assume liquidity is a miracle and need to maximize my upside for that risk. STARTUPS ARE HARD! No matter what happens the next 10 years, you need to read this post and remember the miracle of effort needed to make a start-up succeed.

    Not many people I have run across in my 13 years of managing money deploy my strategy or thinking and that emboldens me. I believe the two ends of the investing spectrum are very connected and I am fascinated by the ‘tells’ I see by watching the all-time high list and Angel List.

    While I am not sure of the next 10 minutes, let alone the next 10 years, I am confident in my work that thousands of web entrepreneurs will take notice and follow my strategy in the years ahead.

  • Coradiant acquired by BMC software

    On the heels of yesterday’s acquisition of Tungle, BMC Software has announced today that they have acquired Montreal’s Coradiant, which was co-founded by Year One Labs partner Alistair Croll. We are happy that Montreal has managed to win something in the last few days.

    The price is currently undisclosed, but the back of the napkin calculation tells me this was a monster one. Probably not as large as the recent Radian6 exit, but sources put this acquisition well in to the 9-figures territory.

    This has been a long time in the making as Coradiant’s founding goes back to 1997 when Alistair Croll and Eric Packman founded NetworkShop.

  • Pushlife acquired by Google

    Details are still emerging but it sounds like another Toronto company has been acquired by the GOOG. We’ve been hearing that the purchase price is close to $25MM, hopefully that’s Canadian Dollars this week and not US Dollars.

    The Pushlife web is currently down. But you can see 10 employees listed on the Company Page on LinkedIn including CEO and Founder Ray Reddy. Ray (@raymondreddy) hasn’t updated his Twitter since December 2010.

    t1m's Tweet

    This makes Pushlife the 3rd Toronto company acquired by Google (Bumptop and SocialDeck being the other two).

     

     

  • Salesforce acquires Radian6 for $326 Million

    This will be all over the news today so I won’t try to keep pace with the commentary, but the news that Salesforce has agreed to acquire Radian6 a Fredericton, New Brunswick company founded in 2006 ,is out.

    I won’t try to keep pace with then endless coverage that will be happening, but here are some thoughts on what is cool about this:

    • Ride the Winners: There is no doubt that Radian6 has had a lot of offers over the years. Competitors such as Techrigy, ScoutLabs and Sysomos likely sold out WAY too early. This is something Roger Chabra has been saying to me for a while: When something is working, stick with it.
    • Canadian made: Radian6 was built and financed entirely in Canada by Summerhill, BDC and Brightspark. They funded Radian6 early and they stuck with it. That’s a great and all too rare story.
    • New Brunswick made: When I tell many of you that I have moved to Halifax I sometimes get questions like “is there any startup community there?” or “Is there any talent there?” — Now I have an easy answer to what I have already found out: This region is brimming with talent and with the right leadership great things can be accomplished.

    Congrats to the entire Radian6 team as well as Summerhill, BDC and Brightspark. This is big news and a great story.

  • Cognovision acquired by Intel

    UPDATE: We are hearing that the acquisition price tag is closer to $30m and possibly even higher. 


    Another great exit for the Toronto startup community and some great news in advance of CIX in a few weeks. Toronto based Cognovision has reportedly been acquired by intel. According to DailyDOOH, which covers the digital out of home market, the pricetag was $17m.

    Cognovision was the winner of the CIX pitch competition last year.

    I have to admit that when I first heard the Cognovision pitch, it felt holodeck cool. It also seemed “too good to be true” — Turns out I was wrong and the company shot to ~$1m in revenue pretty quickly. Using a camera on top of a digital display, Cognovision could give you some rough estimates that covered:

    • Actual Impressions – The number of people who look at your displays
    • Length of Impressions – How long people look for
    • Potential Audience Size – The number of people who walk by
    • Dwell Time – How long people stay near your displays
    • Anonymous Demographics – Demographics of your audience (gender and age bracket)

    Congrats to Shahzad, Haroon an the entire team.

  • State of VC in five years?

    Canada has a great financial sector, a growing economy, tons of smart people and a bunch of pretty snazzy exits recently. Yet, with all this Deloitte and the National Venture Capital Association still predict that the number of VC firms in Canada will continue to decline (hat tip: TechCrunch).

    ?

    Sure, Canada is doing better than US and Europe but we’re not doing so well versus the BIC. The first reaction may be that it is now conventional wisdom that China, India and (lately added) Brazil will  take over the world so it stands to follow more VC will set up in those countries. Fair enough.

    But deconstruct this a little further. The Canadian VC industry has already been decimated over the course of the past few year and yet, according to this survey, over a quarter of the respondents think it will shrink further. (The VC industry’s shrinkage in the US is a good thing I and many other would argue. Too much dead weight)

    And VCs follow exits, well recently Canadian companies have exited to Apple, Google and not to mention a pretty killer IPO. That should bode well for the VC industry over the next five years, but it appears that it doesn’t (Yes, these exits happened after the survey was held, but still….)

    In fact, it seems that achieving exits in Canada  is the number one barrier to expanded investments in the minds of VCs when they think about Canada.  Number 2 barrier is “lack of established venture capital community” which seems like a bit of a vicious circle.

    So what do you think? Should Canada be worried? What can be done to improve the five-year outlook on the Canadian VC scene?

  • Sysomos acquired

    News has leaked out today that Toronto-based Sysomos, a social media monitoring firm, has been acquired by MarketWire.

    As usual, the terms of the deal are not being disclosed, but we do know that, like BumpTop, Sysomos was funded out of the Growthworks Commercialization fund. That would put this deal at well north of $25million, likely landing in at around $35million.  Sysomos was also funded by Ontario Centres of Excellence, who were also instrumental in supporting BumpTop. In fact, like Bumptop, Sysomos also originated at the University of  Toronto and does retain some useful and unique IP.

    This is the second exit for Scott Pelton, who only took over managing the Growthwork’s comm fund in 2008. By Canadian VC standards (or any for that matter), he is on fire and, by my estimate, is chalking up one of the best IRRs that the business has seen yet in this country. Who says VC is dead?

    Sysomos has made rapid progress since taking investment and has managed to consistently raise the bar of social media monitoring standards. No doubt that MarketWire is looking for ways to develop beyond their more traditional media monitoring solution to something that offers more social media coverage. Sysomos’ strong analytics capability will no doubt be useful to MarketWire customers as well.