Q-News

June 2011

Private Equity - May 2011

Posted in Private Equity

There were 25 deals announced in May 2011; three of the announcements did not disclose the amount of capital raised but we know that the other 22 companies raised a total of $85.8 million.  The total number of deals was larger than what we usually report as a result of 12 small deals that were financed by an investment partnership whose mandate is to secure jobs for Quebecers, primarily by investing in traditional businesses. 

This May’s total compared favorably to the nine deals and $42.5 million reported in April and the 14 deals and $84.7 million reported in May 2010.  In total, there were 14 deal announcements coming out of Quebec, six out of Ontario, and two out of BC.  Ten of the Canadian companies receiving capital were in the ICT sector while three of them received at least part of the money from foreign sources.  There were also four announcements in May regarding Canadian funds investing in the United States.


Financings of Canadian Companies

Trillium Therapeutics, a Toronto-based biopharmaceutical company developing treatments for abnormal immune responses, raised $1 million from a new unnamed investor.  The company had previously raised money from VenGrowth Private Equity Partners, BDC Capital and Canadian Medical Discoveries Fund.

Woodbridge-based Newtopia raised seed capital from BDC Venture Capital and several angel investors.  The company provides clients with online coaches that help them address their health issues through personal genetic testing, wireless monitoring tools, and genetically tailored natural health products.

Whatsnexx, a Montreal company whose software allows marketing professionals to automate multichannel web-based campaigns, raised $2.4 million in first round financing from GoCapital and BDC VC Division.

R2Financial Technologies, a Toronto company whose software allows companies in the financial sector to price credit portfolios raised an undisclosed amount of capital from the BDC.

Fuse Powered, a Toronto-based casual mobile game publisher, raised $2 million in seed funding from Toronto’s Blackberry Partners Fund and NFQ Ventures.

Novacap provided $5 million in growth capital to Fleetmind, a Montreal company that develops fleet tracking and management software for transport companies in the waste management and less than truckload (LTL) industries.

Nexterra Systems announced that it had raised $2.5 million from the BDC.  The company develops and manufactures biomass gasification systems that allow large institutions and industrial customers to generate heat and power for their day-to-day operations.  The company had just raised $15 million from Tandem Expansion Fund and Arc Financial back in March.

The Caisse de dépôt et placement du Québec and Capital régional et coopératif Desjardins announced that their partnership had completed ten new deals, totaling a $12.5 million investment in Quebec’s economy.  The ten companies receiving capital, and their description, are as follows: Cam-Trac Sag-Lac (Chicoutimi) is in the business of selling and repairing forestry equipment; Mécanique Plomb O Gaz (Chicoutimi) manufactures and installs industrial piping and heating systems; Panorama Helicopters (Alma) provides helicopter charter services; La Forfaiterie (Stoneham) sells uniquely-presented gift packages that provide the beneficiary with access to restaurants, spas, and other getaways; Stuart Packaging (Mount Royal) manufactures folding cartons; Attraction Media (Montreal) is actually a collection of 6 companies, working together under one roof, specializing in the production of motion pictures, television, and advertising; Les Solutions Victrix (Montreal) provides IT services, with a focus on infrastructure, telecommunications, security, and collaboration projects; Terratube (St-Denis de Brompton) cleans out sludge from municipal and industrial sedimentation ponds; VIF Moulds and Plastics Industries (St-Hyacinthe) is a contract manufacturer of plastic components for the medical, electronics, aerospace, and construction industries; Pavages Nordic (Baie-Comeau) lays down asphalt and asphalt blocks.

Real Ventures, Montreal Start Up, Palos Capital, and Positron Power provided financing to Quebec-based MConcierge Systems.  MConcierge has developed technology that allows hotel guests to use their own smartphones to access a hotel’s service staff, amenities, and custom content prepared by hotel management.  

BlackBerry Partners Fund and NFQ Ventures provided $2 million in seed capital to Toronto-based Fuse Powered, a mobile game publisher.

US and International Activity in Canada

British Columbia’s General Fusion raised $19.5 million in second round financing from Cenovus Energy, Bezos Expeditions (WA), and return investors Chrysalix Energy Venture Capital, Growthworks, Braemar Energy Ventures (NY), Entrepreneurs Fund (UK) SET Venture Partners (Netherlands), who contributed to the company’s $22 million raise in August 2009.  The company is building a utility scale nuclear fusion power plant that will utilize new Magnetized Target Fusion (MTF) technology.

Insight Venture Partners (NY) participated in a $31 million financing completed by DealFind.ca, a Toronto company that offers its members online deals by negotiating bulk discounts with consumer product companies.  The Canadian participants in the financing were Georgian Partners, the Ontario Venture Capital Fund. The company was founded in May 2010 as a division of MenuPalace.com.

Intel Capital led an $8 million first round financing announced by Perspecsys, an Orangeville company whose software allows enterprises to utilize third party-hosted applications without ever exposing sensitive data to the cloud.  MaRS Investment Accelerator Fund and Growthworks also participated in the financing.

Canadian Investments Abroad

Quebec’s Inovia Capital made a $3.25 million seed investment in AppDirect, a business application network that gives companies access to numerous third party SaaS applications through one consolidated platform, a sort of marketplace-as-a-service model.  The company is based in San Francisco but its two founding entrepreneurs, as well as its angel investors and strategic investor - a media and technology company named Stingray Digital Group - are all from Montreal. 

Wellington Financial provided $7 million in venture debt financing to Interact Public Safety, a North-Carolina firm specialized in providing public safety incident response and management software.  Interact Public Safety had previously raised capital from Foundation Capital, Bay Partners and SilkRoad Equity, with their most recent raise being a $28 million round in late 2008.

MMV Financial committed $2.5 million in venture debt to NJ-based Agilence, which helps retail companies minimize operational losses using a combination of POS software and video surveillance technologies. 

Cliffton Group of Montreal participated in a $45 million raise completed by BioAmber, a Minnesota-based company that is working on developing biodegradable plastics.  NAXOS Capital Partners (Luxembourg), Mitsui & Co Venture Partners (NY), and Sofinnova Partners (CA) were the other funds involved in the deal.

Fund News

iNovia Capital, Business Development Bank of Canada and BlackBerry Partners Fund announced that they are launching GrowLab, a Vancouver-based incubator program that will provide startups with free office space and up to $25K in financing.

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