Plus: The largest Series A raised by a Black female founder in Canada.
VCs have been finding it hard to secure capital, while startups are eyeing investors south of the border to balance the arduous demands of growth and profitability. But a few rays of sunshine poked through the grey skies of malaise shrouding the Canadian tech ecosystem.
Cohere announced a $500-million Series D at a $5.5-billion valuation while Clio announced a $900-million Series F at a $3-billion valuation, making it the largest round ever raised in the country, according to John Rikhtegar, director of capital at RBCx.
BetaKit covered both rounds in detail this week, so I suggest you give those stories a read below. But I want to dig a little deeper into the macroeconomic and market conditions surrounding Clio’s fundraise.
The 16-year-old company was ready to go public “on a moment’s notice” following its Series E raise in 2021, but the IPO window closed by the end of that year. Big Tech stocks were up in the first half of this year, but last week the Nasdaq posted its worst trading session since 2022. NEA, which has successfully brought companies like Cloudflare and Groupon public, led Clio’s round, a signal that an IPO is still the plan. When it happens is dependent on when interest rates drop, Rikhtegar said. Plus, Klaviyo and Instacart recently went public with $400 million in annual recurring revenue—Clio is halfway there.
Meanwhile, secondary markets in the US are hot right now because LPs are looking for liquidity. There’s no equivalent data for Canada, Rikhtegar said, but the US market saw three consecutive six-month periods of capital calls outpacing capital distributions. In a strategic way, Clio refreshed its cap table and kept both investors and employees motivated to continue growing the business toward an eventual IPO.
After years of seeing more companies return private than go public, it’s a big deal to have a major Canadian tech IPO once again on the horizon.
Thanks for reading on and ’til next week,
Bianca Bharti
Newsletter editor
Discover Shakepay: earn bitcoin easily and join a growing community!
The rumours are true—Shakepay lets you earn bitcoin just by shaking your phone.
And that’s just the beginning. With the app, you can buy bitcoin for as little as $1 and earn bitcoin rewards in ways that are actually fun: by keeping up your daily shaking streak, shopping with the Shakepay Card, or getting a bitcoin bonus on payday – we call that getting #shakepaid.
Shakepay is easy to use, secure, and lightning-fast. It’s regulated and registered with securities authorities in all Canadian provinces.
The goal’s an ambitious one: bring the power of bitcoin and financial freedom to every Canadian. Join a community of more than 1 million across the country and get started at shakepay.com.
Shakepay’s growing fast and hiring big time. Want to join the team or know someone who’d be a great fit? Check out their open roles.
TOP STORIES OF THE WEEK
Claudette McGowan closes $10-million Series A for cybersecurity startup Protexxa
Toronto-based cybersecurity startup Protexxa says it has set a “new achievement” in Canada with the closing of its $10 million CAD Series A round.
BKR Capital managing partner Lise Birikundavyi told BetaKit that, as far as they are aware, the Series A round is the biggest equity round for a Black woman founder in Canada.
(Read more)
Cohere Series D hits $500 million USD raised at $5.5-billion valuation
Toronto-based generative AI startup Cohere has topped up and officially closed its Series D round, raking in $500 million USD at a $5.5 billion valuation.
Last month, BetaKit independently confirmed reports that Cohere had raised a first tranche of $450 million USD from returning backers that included chip giant Nvidia and Salesforce Ventures, as well as new investors like Cisco and Canadian pension fund PSP Investments.
Following the fundraise, Cohere laid off five percent of its staff.
(Read more)
Clio tops $4-billion CAD valuation with largest software funding round in Canadian tech history
The legal SaaS provider’s all-equity Series F round was financed entirely by new US investors. New Enterprise Associates led with support from Goldman Sachs Asset Management, Sixth Street Growth, Alphabet’s CapitalG, and Tidemark. It comes shortly after Clio crossed $200 million USD in ARR, the company claimed, up from $100 million USD in 2022.
“We wanted to bring on a group of investors that had expertise and a demonstrated capability to assist companies in … that next part of the scaling journey from $200 million [USD] of ARR to a billion dollars of ARR and beyond,” Clio co-founder and CEO Jack Newton told BetaKit in an interview.
(Read more)
Giving Canadians a fair shake
In recent months, residents of British Columbia and Alberta might have noticed a brightly wrapped, modestly-sized blue caravan cruising the local streets.
The “Shakemobile,” as it’s known, is on a cross-country tour to engage with Canadians who are feeling the squeeze of inflation and high interest rates.
(Read more)
How Symcor is helping Canada get ready for open banking
Late last month, Canada’s prolonged road to open banking hit a new milestone: the federal government’s Bill C-69 received royal assent, officially enshrining the implementation of a consumer-driven banking framework into law.
At the heart of the open banking conversation is data, and how it can be used to foster greater competition and innovation in financial services. For Canada to meet this objective, it’s crucial that companies providing or receiving this data meet regulatory, technical, security, and operational guidelines.
(Read more)
Looking for a job? Try a company that makes money
These days, when Anne Ngo sits down to interview a candidate, she gets questions about how her company thinks about runway and growth.
The Director of Talent Acquisition at Toronto-based Carbon6 said job seekers used to ask her about compensation and company perks. But recently, a different set of priorities has emerged.
(Read more)
AWS Activate helps startups reduce costs and increase speed to market.
AWS helps startups bring their ideas to life through AWS Activate. As you build and scale your business, Activate credits grow with you to support your changing needs. If you’re an AWS Activate member, you may be eligible for up to $100,000 in credits to help offset your AWS bill.
Credit eligibility AWS credits packages for early-stage startups is based on stage and affiliation with Activate Providers, which are thousands of accelerators, angel investors, venture capital firms, and startup enabling organizations around the world. Select the package that’s right for your startup today.
Visit AWS Activate to get started.
Funding, Acquisitions, and Layoffs
BC – CICE invests $7.6M across nine companies
VAN – Gumloop – $4.28M CAD
BUR – Loop Energy alerts creditors to restructuring
TOR – RetiSpec – $13.8M CAD
TOR – Cycle AI acquired by Crossmint
QB – INRS invests $7.4M CAD across three projects
MTL – Workstaff – $1.6M CAD
CHA – Biovectra acquired for $1.27B CAD
The BetaKit Podcast
Why has developer hiring slowed? (AMA episode)
“It was a seller’s market during the pandemic … They were staffing up in the anticipation of growth that never actually materialized. It’s now a buyer’s market.”
For our 350th episode (!) of The BetaKit Podcast, the gang once again attempts to survive an overstuffed mailbag of listener-submitted questions regarding: the fediverse, federal cleantech tax credits, disappeared Alberta investor tax credits, and interesting Indeed job numbers.
De-risking Innovation Adoption in B.C
From supporting the testing and integration of zero- and low-emission trucks at the Port of Prince Rupert to helping farmers procure new technology for their operations, B.C.’s Integrated Marketplace is catalyzing innovation across the province. Delivered through Innovate BC, this program works to de-risk innovation adoption for B.C. industries while giving local solution providers an avenue to connect with significant customers to aid in their growth.
Learn more at innovatebc.ca.
Feature image courtesy Jack Newton via LinkedIn.