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StoneCalibre Acquires XMedius Solutions From Sagemcom

Los Angeles-based private equity group StoneCalibre has acquired XMedius Solutions, the Montreal-based subsidiary of France’s Sagemcom Documents SAS that facilitates secure document exchange for large enterprises and small/mid-sized companies across a variety of industries.

This is the first acquisition in Canada for StoneCalibre, which is privately funded and focuses on lower middle market companies.  The seller, Sagemcom, is a leading communications equipment manufacturer with over 1.3 billion euros in revenue, 4,200 employees, and operations in 40 countries.

To read more about the transaction, click here.

Posted in: M&A News

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Toronto’s Tickld Acquired by Gateway Media

We were pleased to hear about the acquisition of the Toronto-based viral content creator Tickld by St. Louis-based Gateway Media, owner of digital properties such as AroundMe and CinemaBlend.

Tickld is a leader in creating original viral content with a following of over two million people on social media.  Its 14-person team will remain in Toronto following the acquisition.

To read more about this transaction, click here.

Posted in: M&A News

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Canadian VC Funding in October and November 2015

Courtesy of Techvibes and Index.co, here are the lists of Canadian companies that disclosed new rounds of venture capital funding in October and November.

In October, 22 Canadian companies raised a combined $168 million in venture capital, including an impressive $60 million investment in the Waterloo-based drone company Aeryon Labs, which is already backed by the MaRS Investment Accelerator Fund.  Click here for the full October 2015 list.

In November, 19 Canadian companies disclosed a total of $92 million in VC funding, the most prominent of which was a $34 million investment in Toronto’s VarageSale, a platform that allows customers to sell their unused clothing, toys, and household items.    Click here for the full November 2015 list.

Posted in: PE/VC News

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Vancouver’s Elastic Path Raises $10 Million

Elastic Path, a Vancouver-based customer experience software company, has raised an additional $10 million in venture capital funding from Yaletown Venture Partners and BDC Venture Capital IT Fund.  The company had previously raised over $14 million in a combination of private equity, venture capital, and debt financing.  It offers a commerce integration platform – delivered through the Adobe Marketing Cloud platform – to over 200 enterprise customers around the world and has a current headcount of over 130 employees.

To read more about this transaction, click here.

Posted in: PE/VC News

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AppCarousel Acquired by AppDirect

September 24, 2015

Congratulations to the AppCarousel management team on their acquisition by San Francisco-based AppDirect.

Having worked with the team at Wmode (now renamed AppCarousel) since 2002, it’s great to see them realize a very profitable exit. We had the privilege of being Wmode’s exclusive banker for a $5 million financing with Teleglobe in 2004 and a $6 million financing with Wellington Financial LP in October 1996.  During the summer of 2015, Q1 Capital was engaged by the Wmode Board of Directors to provide an assessment of two alternative liquidity options that were being considered and was ultimately engaged to provide the Board with a formal Fairness Opinion.

Founded in 2000 as a Mobile Content Distribution Service that facilitated the management, delivery, and payment of mobile internet media, privately held and Calgary-based Wmode licensed its platform to carriers in the US, Canada, and Europe and, with management foresight, adapted to the fast changing mobile content space and moved aggressively into the mobile app management space for cars, TV, and connected devices with the launch of AppCarousel in late 2011.

About AppDirect:  AppDirect offers a cloud service marketplace and management platform that enables companies to distribute web-based services. The global network of AppDirect-powered marketplaces allows businesses to find, buy, and manage the best applications the cloud has to offer. (www.appdirect.com)

Posted in: M&A News

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FundThrough Presents at the July TechToronto Meetup

I had the opportunity to attend the most recent TechToronto Meetup at Telus House on July 6.  It was a fantastic event with a large and enthusiastic crowd.  It seems TechToronto is fast becoming one of the focal points for Toronto’s tech community.  With so many niche tech events taking place in Toronto that are geared towards particular groups like open-source or app developers, it was encouraging to see a nice mix of founders, developers, professionals, and others involved in the local tech scene coming together to hear a group of highly experienced presenters discuss topics to which everyone could relate.  Kudos to the TechToronto organizers Jason Goldlist and Alexander Norman for putting together a fantastic event.  I look forward to attending more of these events in the future.

One of the presenters that I found particularly interesting that evening was Steven Uster, who recently founded a company called FundThrough, a Toronto-based startup that provides small businesses with an alternative source of financing through a short-term line of credit as a substitute for applying for bank loans or bank lines of credit.  FundThrough is used as a method of guaranteeing that operating cash flow is always available for businesses with established customers. It was launched with the help of a $2.2 million venture financing round led by Real Ventures, with investments also made by Peter Carrescia of OMERS Ventures, Five Elements Ventures, Barlow Lane Holdings, and Origin Merchant Partners.

This seems like a very promising new funding platform and we wish Steven and the entire FundThrough team the best of luck.  To learn more about the company, click here.

Posted in: Q1 Blog

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The Strange Death of the Tech IPO

In his Financial Times article, Jonathan Ford discusses the trend towards the decreasing number of initial public offerings, as many startup founders choose late stage funding rounds over listing their companies in the public market. Ford notes the following benefits and drawbacks to this trend:

For technology company founders, staying private for longer can be beneficial by allowing them to focus on their core operations rather than the demands of public shareholders. This allows them to develop their businesses, placing them in a stronger financial position when the choice is made to eventually undertake an IPO. This helps founders avoid a repetition of the dot-com bubble by building companies with sustainable revenue models rather than taking them public prematurely.

The downside of electing to take late stage financing over an IPO is that as greater numbers of investors compete to finance a limited number of startups, the result is often overvaluation. Ford remarks that this can lead to substantial losses for investors, as valuations are not sustained once the companies undergo an IPO and become publicly traded.

Ford’s conclusion is that although this tech boom differs from the dotcom bubble, a greater number of IPOs may be beneficial for today’s tech market. For subscribers to Financial Times, click here to read the full article.

Posted in: PE/VC News

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It’s a Tech Bubble. Or is It?

In the ongoing debate over the current state of tech startup funding, some experts believe that we are in a bubble, with an imminent burst in the near future, while others perceive the state of venture capital and start-ups as being much less of a cause for concern. Although the majority of experts view the market as overvalued, there is a lack of unanimity regarding whether the market is in a bubble or not.

Here is an article posted on Betakit, providing the viewpoints of a number of investors who offer their insight into the tech bubble debate. Comparing their differing outlooks on the market helps to provide a greater level of perspective into this discussion.

Posted in: Tech News

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M&A Surges, But It May Not Last

The record breaking M&A volumes in the United States that have been occurring in the past year are not generating optimism among all experts.  US M&A activity in the first quarter of 2015 increased by 52% over the same period in 2014, coinciding with a number of announcements of major future deals and resulting in some fears about a repetition of fall in deal activity following the 2007 financial crisis.

While most experts do not believe that another crisis is likely, there is still unease regarding the current uses of corporate cash. Companies have been holding onto increasingly large cash positions, raising questions as to where the money is best spent. Recently, the answer has been acquisitions and share buybacks. This type of spending has resulted in a decline in traditional forms of capital expenditure, with such outlays falling from 29% to 23% of operating cash flow over the past decade. There are fears that near-term stock performance may come at the price of future productivity.

To read more about the current M&A trends, click here 

Posted in: M&A News

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Inbound Investment

For Canadian companies, rising levels of foreign investment is a positive trend as greater numbers of US, European, and Asian investors are enticed by opportunities in Canada, contributing to a record volume of M&A activity not seen since 2007. A growing portion of this activity comes from the acquisitions of less sizable companies with enterprise values between $25 and $50 million, made by small US private-equity funds that are being forced to look outside of the US due to increasing valuations and intense competitive pressure for deals.

This increase in deal activity is very positive for Canadian sellers and companies looking for growth capital as prices are bid up and deal terms become less onerous. Overall, this appears to be a positive trend for Canada, providing further exit opportunities for Canadian businesses.

To read more about investment into Canada, click here

Posted in: Archive, M&A News

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