Q-News

February 2011

Private Equity - January 2011

Posted in Private Equity

There were ten deals announced in January 2011, eight of which disclosed the actual amount of money raised, adding up to $40 million in new capital.  The dollar figure amounts to a material decline from the $75.6 million in new capital reported in January 2010 and the $76.3 million reported in January of 2009, both of which involved eight transactions.  Four of the January financings took place in Quebec, three in Ontario, two in Newfoundland, and one originating out of British Columbia.  All of the deals, with the exception of two of the Ontario transactions, involved companies in the information technology space.  The two Ontario-based exceptions included a biomedical development firm and a Clean Tech company.  The two announcements involving Canadian players investing in US companies also took place in the IT space.


Financings of Canadian Companies

Mississauga-based Woodland Biofuels raised $12 million to build a biofuel plant implementing the company’s technology.  Instead of relying on corn, the plant will use wood, agricultural and municipal waste as the feedstock for biofuel.  Toronto-based Investeco Capital is the qualified private sector investor funding this deal alongside government-sponsored Ontario Emerging Technologies Fund.

Interface Biologics raised $7 million.  The organization is a University of Toronto spinoff operating out of the MaRS Discovery District in Toronto with technology used to coat implantable medical devices with biomedical polymers that reduce infection.  The capital came from Business Development Bank of Canada, Covington Capital, and VG Partners.

Montreal-based Vantrix raised $3 million in the form of debt financing from Wellington Financial.  Vantrix provides its international telecom carrier clients with economically efficient mobile video optimization and delivery technologies.  The company previously raised equity financing from Tudor Ventures (MA), JK&B Capital (IL), Innovacom SA (CA), Entrepia Ventures (CA), as well as Canada’s Summerhill Ventures and BDC Ventures.

Quebec’s Ryma Technology Solutions, which provides product management software and services to software companies, raised an undisclosed amount of capital from MMV Financial, a specialty debt financing firm based in Toronto. Ryma Technology Solutions previously raised $3 million from MMV in September of 2007 and $10 million in equity financing from iNovia Capital and Novacap.

Newfoundland-based ClearRisk raised $1 million from Growthworks’ Atlantic Venture Fund.  The company provides risk management software to the insurance industry and SMEs via a SaaS model. 


US and International Activity in Canada

Storage Appliance Corporation, a Toronto-based technology company that develops PC and Mac backup products under the ClickFree brand name, received funding from California’s Intel Capital.  The press release for this financing does not specify the amount invested by Intel.  It does however say that the round brings the total amount of capital raised by the company to $33 million – which implies that this investment by Intel was approximately $3 million.  The company raised its previous $15 million round with Tandem Expansion Partners in August 2010 and stated that the cumulative amount of capital raised at that point had been approximately $30 million.

Isreal’s Vertex Venture Capital participated in an $8 million second round financing announced by Neuralitic Systems, a Montreal-based company that has developed a data services optimization platform for mobile network operators.  Canadian investors in the deal were BlackBerry Partners Fund, Export Development Canada, BDC Venture Capital, and GO Capital (Quebec fund managed by BDC). 

In-Q-Tel, a Virginia-based investment firm that was started by the CIA, made an investment in BC-based Teradici.  The company has developed a desktop virtualization technology that allows data centers to send the entire computing experience across standard IP networks using a proprietary protocol that only allows secure devices to read the outputs.

Hasting Equity Partners (MA) and Admiralty Partners (CA) made an investment in Newfoundland-based Marport Deep Sea Technologies.  The company develops software and hardware for a broad range of sonar applications.


Canadian Investments Abroad

Montreal’s iNovia Capital was one of two funds participating in a $2.25 million raise by TagMan, a NY-based company whose software enables large e-commerce companies to reduce the amount of time spent on tagging their websites while also generating more useful information from the tracked tags.

California-based Ooma closed a $3 million debt financing with Toronto’s MMV Financial.  Ooma sells its customers a device that provides them with 5,000 minutes of free VOIP phone service per month.  The company has raised over $60 million since 2000 with backing from investors such as Draper Fisher Jurvetson (CA), Worldview Technology Partners (CA), Draper Richards  (CA), WI Harper Group (CA), The Founders Fund (CA) and TDF Fund (MD).


Fund News

Cycle-C3E, a Quebec-based venture capital seed fund, announced the closing of its inaugural $42 million fund.  The capital will be invested in Quebec-based Clean Tech companies.  The money is coming from the Government of Québec ($16.5 million), the Fonds de solidarité FTQ ($10.9 million), and FIER Partenaires ($5.6 million), with the remaining $9 million coming from private sector industrial partners.  The fund will be managed by Cycle Capital Management.

Clairvest (TSX: CVG) announced the close of their fourth fund with a total commitment of $342 from third party investors.  Clairvest itself will be the largest contributor to this partnership as it intends to top off the fund with another $125 million. 

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