StartupNorth

Category: Venture Capital

  • indochino.com takes new round of financing from Burda Digital

    Shanghai (by way of Victoria) based startup, Indochino.com, who we first profiled in September, and who I finally got around to ordering from a few weeks ago, has announced that they have taken a new round of financing from Burda Digital Ventures, a German Venture Capital group who have been very active in Western Canada, getting a lot of deals that Canadian VCs are missing including TeamPages, Suite101.com and Nexopia

    Indochino.com is a unique online retailer that specializes in custom-tailored suits, shirts and other apparel based on measurements done by the customer. I ordered a jacket and shirt from them a few weeks ago and I think I got a taste of both ends of the spectrum of ordering online.

    The shirt came and right out of the package it was hands down the nicest shirt I have ever bought. The fit was perfect and it looked and felt great. The jacket looked great as well, but a few of the measurements are off. So I printed off their claim form and will take the jacket to a tailor tomorrow. For the price however, the jacket is great.

    This round of financing is focused on building the operations back-end as well as scaling up to meet growing demand.

    This is a long way from where they were when I first profiled them just 8 months ago and things are looking up. I am looking forward to seeing what they do in the next 8 months with new financing and some more experience behind them.

  • Presenting companies announced for CIX 2008

    If you are going to have a beauty contest (or not), the contestants may as well be good looking, and CIX seems to have delivered. I have to admit that I didn’t even think the list would turn out this well. There is a cross section of everything from startups to companies looking for follow-on rounds.

    There has been some debate recently about the value of events like CIX, and I have to admit, I have not been easy on similar events in the past, but I have to say that I think it is time to move on. If you think CIX is all about a bunch of companies getting up and presenting, then you are wrong. I think of CIX more like a DEMO or Techcrunch 50 for the Canadian community, and that is something we need.

    More than that, a lot has changed in the Canadian Startup community in the last year, and this is a chance to start putting more names to faces, and for more shy startups to start coming out of the shadows. It is also a chance for the Venture Capital community to pull back the curtains and start connecting more closely with the community.

    We are using the CIX space to put on a second StartupCamp. So if you didn’t get a chance to get your name out there at CIX itself, make sure you put your name in the hat for StartupCamp.

    The list of presenting companies was released today, you saw it here first!:

  • Spring Acquisitions: Meriton Networks & Sirific Wireless

    As promised… we have a couple spring acquisitions:

    Meriton Networks, an optical networking infrastructure company based in Ottawa, has been acquired by Xtera Communications. Meriton had taken venture financing from: Desjardins Venture Capital Group, Newbury Ventures, Nomura International, Primaxis Technology Ventures, RBC Capital Partners, VantagePoint Venture Partners, VenGrowth Capital Partners, Skypoint Capital. The acquisition price has not been disclosed.

    Sirific Wireless, a fabless semiconductor company specializing in CMOS RF transceivers based in Waterloo, has been acquired by Icera. Sirific had taken venture financing from: Agilent Technologies, BDC, Celtic House, GrowthWorks, Hunt Ventures, Intel Capital, Solowave Investments, TD Capital, and Tech Capital. The acquisition price has not been disclosed.

    Hat tip to Mark McQueen of Wellington Financial, who described the exits as follows:

    Although details weren?t announced, these don?t feel like successful exits. Probably somewhere in that middle of pack for that vintage. Neither company had announced the kind of revenue generating customer traction (think Dragonwave and Clearwire) that drives a home run. And they both raised tens of millions over 8 or so years. Yes there was value built (which the strategics can afford to fund and harvest) but after that long these are deals where the clock ran out.

    Sounds like a little portfolio spring cleaning to me.

  • iNovia launches a new fund – Seed and early stage venture capital

    iNovia is announcing their new fund today. The new fund, which comes in at $107million is focused on Seed and Early Stage deals in the information technology, life sciences and cleantech sectors.

    iNovia, who most recently participated in the funding of StandOutJobs, has been engaging the startup community pretty directly lately and are usually visible at events like StartupCamp, blitzweekend and others. iNovia promotes itself as “Entrepreneurial Capital”. By they mean that they come from diverse and relevant backgrounds. Instead of being full of ex-banker, iNovia tends more towards entrepreneurs and people with experience working with startups.

    With its recent additions, the iNovia Capital management team now comprises a diverse group of professionals, all of whom have operational or financial backgrounds, coupled with strong technical and business expertise. iNovia has also established a network of Venture Partners and Entrepreneurs in Residence, who provide industry insight and expertise, along with access to a large network of collaborators.

    “Entrepreneurial Capital” can mean something else as well, and I think iNovia just might deliver. My definition of “Entrepreneurial Capital” is an Angel or VC who is just as hungry and hustles just as much as any startup. From coast to coast we hear complaints about poor dealflow for VCs and that this hurts their business. This may be true to an extent, but it is about to get a lot worse for those VCs who don’t show that same Entrepreneurial Spirit. Firms like iNovia, Montreal Startup, EVP and others are all going to be scooping up more and more of the best deals at very early stages simply because they will be engaged closely with the very communities that are giving birth to these startups.

    Technology Venture Capital is a startup business in Canada. It is young, the players are largely inexperienced and the market is small but emerging. This is a good thing. If you are a VC with money to spend, you can still win. There is a massive community forming that is almost exclusively to your benefit and that community is working harder than ever before now.

    We will be watching iNovia closely to see if they live up to all my hype.

  • Rick Segal announces tour dates [lessons for VCs]

    Rick Segal is going on tour. The idea? Get the message out there about what he, and other VCs, are looking for when they evaluate new opportunities, and help entrepreneurs get a better understanding of what VCs try to do. He will also be providing some useful tools, like sample term sheets.

    This comes as there has been more publicity about the performance of private Venture Capital funds in Canada, and a significant amount of discussion about whether or not it is a good idea to start a company in Canada.

    There is definitely a perception out there of VCs in ivory towers who expect everything to come to them. This is in stark contrast to the attitude that most entrepreneurs encounter when in the valley or elsewhere with a strong VC ecosystem. You get used to seeing VCs out at practically every community event, listening closely and watching as entrepreneurs grow. Those traits are rare here. As someone said to me recently “In any other business, if you complained you had no customers, everyone would tell you you are an idiot. We need to get out there an hustle, we need to find those customers.”

    What Rick is doing is an example of how you can get out of your tower and start mingling with the plebs. The fact is, Canadian VCs aren’t poaching all sorts of great deals from other places, instead they rely on Canada to produce investible startups, and the best way to recognize that is to get involved and to take a long-term view. Venture Capital is only one piece of a big picture, but it is critical that VCs begin to mature along with our Angels and Entrepreneurs.

    There has been a significant amount of anti-VC sentiment in the Canadian startup community and it is probably more related to a feeling of VCs being an unknown than anything else.

    Here are the dates that are set up so far, starting on the east coast

    • April 14th Morning – Halifax NS
    • April 14th Evening – Moncton NB
    • April 15th Evening – St John’s NF

    If you want to register, email rick at jlaventures dot com with “VC Roundtable” in the subject.

  • CIX – Canadian Venture Capital Meetup

    cix.pngBack in June, StartupNorth was one of the first places to break the story of the death of the Toronto Venture Group. Every year the TVG had an event called the “Venture Forum”, which died when the TVG was shut down.

    It didn’t take long for the gap to get filled in however, and soon enough the CIX was announced. The premise is largely the same: Companies are pre-selected to pitch a room full of VCs who will presumably think about funding some of them. You need to apply to present, and then your company will be vetted by a selection committee. The cost to attend and present (if you are chosen) is about $1,000 in total, or $495 if you are just attending.

    Is CIX worth attending?

    This conversation got kicked off today on David Crow’s blog after David posted about CIX, Ali Asaria, the guy behind Well.ca, suggested that $500-$1,000 was actually a lot of money for a startup, no matter what stage they are at.

    It is true, $1,000 is a lot of cash, but the truth is: it isn’t too much. The question here isn’t about money, it is about value. Will you get anything out of 2 days in a conference full of other people who are trying to make this ship sail in Canada? I think you will. The thing is: It is completely up to you. You can find the agenda for the two days here.

    To make the best of this event you need to come at it with the right frame of mind: Make as many connections as possible, tell as many people as possible about your startup as you can, and finally, get as much advice as possible.

    In the run up to CIX we will have a few posts about kicking butt at CIX, for both the VCs and the Entrepreneurs.

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    StartupCamp

    There is also StartupCamp, which we are putting on for free during CIX. We decided to do this because it will give a chance for the startups presenting at StartupCamp to get exposure to a crowd that doesn’t always come out to these events.

    Where companies that present at CIX will be somewhat established and will have already figured out their pitch, StartupCamp is for companies who are still trying to work out the details of their business plan.

    You can fill out this form to apply to pitch at StartupCamp. We’d love to have some unknown but awesome startups to show off!

    You can register for CIX here.

  • MontrealStartup – A new $3m fund for Montreal startups

    monteral_star_up_logo_small.jpgWe spoke with John Stokes from MontrealStartup last week about an announcement they will be making today. They are announcing a new $3 million fund to invest in early stage startups on the Island of Montreal.

    MontrealStartup is a unique type of VC, they are a consortium of 20 partners, mainly entrepreneurs, based in Montreal who want to do what is best for Montreal. The investors in the fund include John Stokes, Daniel Drouet, JS Cournoyer, Alan MacIntosh, Austin Hill and Mathieu Duffar.

    At $3 million, it is also the smallest fund I am aware of, that isn’t necessarily a bad thing however. Having a small fund is going to force Montreal Startup to act and behave just like a startup. They are going to know exactly what you are going through, because they will be dealing with many similar bumps themselves. It will also force them to learn to adapt quickly in a way that other VCs may not feel the pressure to do.

    This new fund, which is composed of $2 million from The Ministry of Economic Development and a further $1 million directly from MontrealStartup, will be managed completely by MontrealStartup.

    The fund will look at investments between $50,000 and $400,000 to be made in startups who are focused on the Web, Wireless and New Media. MontrealStartup most recently invested in StandoutJobs, and will start investing through this new fund immediately. They are looking for startups who have solid ideas with some market potential but they aren’t necessarily looking for complete business plans. What I like about Montreal Startup, from what I have seen so far, is that they are focused both on providing capital to startups, and using their well established networks through their investors, who are all successful entrepreneurs.

    Due to the size of the fund, there is practically no management fee and the only opportunity for Montreal Startup to profit is to find the best deals that exist in Montreal and then to work hard to make sure that those startups are successful.

    This is good news for Montreal. I am looking forward to hearing about some deals getting done. If successful, Montreal Startup will be one of a new type of VCs in Canada who are far more engaged with local startup communities than ever before. The future success of these funds depends heavily on the amount of local startup activity, and it is in their interest to foster that in a more direct way than the typical VC has done so far.

  • Ontogenix raises funding from GrowthWorks

    GrowthWorks LogoOntogenix, based in Toronto, has been developing its patent pending social media ad serving technology for the last 3 years. Things are looking up, earlier today we heard Ontogenix landed a substantial round from venture capital fund GrowthWorks and strategic investor Pareto Corp (TSE: PTO).

    The company was founded in 2005 by Amit Kanigsberg (former Pareto CTO), Josh Mozersky (Queen’s University Professor of Logic), and Daniel Veidlinger (California State University Professor of Linguistics). As part of the funding round, Ontogenix is bringing on serial tech entrepreneur Chetan Mathur as Chairman and industry expert Marc Ruxin (SVP Digital Strategy & Innovation for McCann Worldgroup in San Francisco) as a board member.

    Ontogenix is raising the round to go to market with their first product, an Interest Correlation Engine. The technology is designed to increase the relevance of ads presented on social media sites (e.g. Facebook, MySpace, etc.) by targeting users based on their individual interests. The company searches for information on the general public’s interests, attitudes, and opinions on hundreds of publicly available sources such as social networks, blogs, and forums. This information, collected in aggregate to preserve user privacy, is then combined with the company?s proprietary data model to form the basis for a predictive engine that can tell advertisers which ads will have high relevance to different types of users.

    A number of companies are gunning for this market including Lookery and Lotame. In pilot tests, Ontogenix was able to increase click through rates by 400%. With Google publicly expressing remorse for the $900M guaranteed ad deal with MySpace and Facebook being lambasted for their Beacon program, it is high time someone figured out a better way to serve ads on social networks; we’re hoping it’s a Canadian startup.

  • Canada Needs to Realize The Technology Business is a Race

    Canada’s pace in the technology industry is too slow. Commercializing innovation and business are a tough race. Only the swift and the lucky survive. I’m starting to believe the heart of the problem lies in our attitude. We plod along and make excuses as others pass us.

    When you meet technology people from Silicon Valley, you’ll notice that they are in a race. They’re in a race to get to work, to get food and get back to work, and to do whatever they need to do to be productive as much as possible. They’re in a race to raise more money than their competitors, grab talent from anywhere they can, sign deals and build big companies. They’re in a race to thrive.

    When you meet technology people from Africa, you’ll notice that they are in a different kind of race. They’re in a race to adopt mobile technology, to communicate easily where in recent memory it was quite difficult. They’re in a race to stop infectious disease, ease the burden of massive migrations of refugees, and stop the famine and drought that threaten so many. They’re in a race to survive.

    When you meet technology people from Canada, we’re not in a race. We’re watching the race from the sideline. We act like technology entrepreneurship is closer to farming than shark hunting, as if risky business isn’t necessary to make the next Google or Microsoft. We putter around as if slow and steady actually wins races to innovate and grow technology businesses. We fail to light a fire under young entrepreneurs, like the ones that started every major tech company you can think of, and our best venture capitalists are putting their ships on “coast”. In a world of accelerating change, those are very dangerous habits. We need to lose our current attitude quickly.

    If you have any illusions that our major media and technology conglomerates are going to take care of this job for us, please give up your fantasy now. Dinosaurs don’t know how to innovate. Our mobile data rates are worse than third world countries and they’re spending money to slow down your internet connection. That isn’t innovation, that’s strangling the golden goose before it can lay eggs. Startups are starving while they get fat on high prices for mediocre services.

    My friends in the Canadian tech community are doing a lot to try and help technology startups. David Crow, Boris Mann, and Jevon MacDonald are all collaborating with multiple parties to improve the situation. I wholeheartedly support them in their efforts. But I think we have an entrenched culture of mediocrity that needs to be surgically removed.

    The biggest change has to be in our attitude. We need to become bold, we need to embrace risk, we need to aim for the stars. We need to take big chances, learn the lessons from failures, and have some great successes. The only thing holding us back is the size of our own dreams, and our determination to see them fulfilled.

    Will Pate is a street smart web geek, Community Evangelist at ConceptShare and co-host of commandN. This is his first post on StartupNorth.

  • Overlay.TV lands a $4,600,000 Series A

    Overlay TV LogoCeltic House Venture Partners, EdgeStone Capital Partners and Tech Capital Partners announced today a Series A investment of $4,600,000 in Overlay.TV.

    The company, based in Ottawa, is building out an internet video-advertising platform that allows viewers to interact with online video, and enables content owners and distributors to monetize videos. Videos stream from their original location (e.g. youtube) and viewers are able to opt-in to receive overlays with contextual information and links (e.g. affiliate shops).

    Stay tuned for a full review following the official launch February 14, 2008.