Kitchener-Waterloo-based ApplyBoard has raised a $100 million CAD Series C round of funding, with the company claiming that its post-money valuation now sits at $2 billion CAD.
If accurate, ApplyBoard’s new valuation makes it the latest Canadian tech company to reach Unicorn status: a private company with a market value over $1 billion USD. Prior to 2019, Canada had struggled to produce Unicorns, with the Narwhal List reporting no new Unicorns since Kik Interactive in 2015. That changed last year with Quebec City’s Coveo and Montreal’s Nuvei both surpassing $1 billion valuations.
The $100 million raise comes just shy of a year since ApplyBoard announced its $55 million CAD Series B.
ApplyBoard’s Series C round was led by Ohio-based venture firm Drive Capital, with participation from Fidelity Investments Canada ULC and Business Development Bank of Canada (BDC), as well as existing investors Anthos Capital, Artiman Ventures, and Plug and Play Tech Center. ApplyBoard told BetaKit that the $100 million raise was all primary capital and equity investment.
The Kitchener-Waterloo based startup was founded in 2015 and offers an artificial intelligence-enabled recruitment platform helping international students apply to post-secondary education abroad.
The $100 million raise comes just shy of a year since ApplyBoard announced its $55 million CAD Series B. The new funding brings the company’s total funding to date to $172 million CAD, including a $17 million Series A in June 2018.
ApplyBoard’s co-founder and CEO Martin Basiri had previously told BetaKit the company expected to raise double its Series B after seeing solid financial growth over the past year. Speaking with BetaKit last year, Basiri claimed ApplyBoard had seen consistent growth over the past couple of years, with 12,000 percent growth in 2019.
Currently, the five-year-old startup works with more than 1,200 educational institutions and 4,000 recruitment partners around the world and claims to have directly assisted over 100,000 students.
“We are excited about [reaching Unicorn status],” Basiri told BetaKit this week. “More from the point of view that money for us is a resource to hire more people, but also [we are] able to do our vision.”
ApplyBoard’s new funding and unicorn status comes as many of Canada’s top startups are reeling from the effects of COVID-19.
“One thing that’s important to us is the fact that we will be able to help more people and have all the resources to do so,” the CEO added. “Other than that, valuations is just a number, like you’re on a good footing, and we are happy to be in this situation and we can help more people.”
The Series C round notably closed in late March, with Drive Capital partner Nick Solaro noting massive societal changes between signing the term sheet in February and officially closing the deal.
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“We went through almost the entire diligence period being physically unable to go visit the company because we’re all in ‘shelter in place,’” Solaro told BetaKit. “So the world changed quite a bit between the time we signed that term sheet and the time that we closed the deal.”
ApplyBoard helps international students apply for post-secondary schooling in North America and the United Kingdom. Despite open questions across the education sector on the long term effects of COVID-19, and on international students specifically, Solaro said he is confident that the fundamental thesis of Drive’s investment is intact.
“Do we have questions about the fall semester of 2020, yeah, sure, of course we do. But this isn’t a quick flip or a trade,” he said. Solaro noted that Drive sees the opportunity for ApplyBoard to lead in a virtual, global recruitment market with what he said has hundreds of billions of dollars in tuition and hundreds of millions of students.
International students make up around 20 percent of the overall student body in Canada and are becoming an increasingly important revenue source for universities. This reliance has raised concerns about a drop-off in September enrolments given the current global pandemic.
For his part, Basiri told BetaKit that one report he saw noted 90 percent of international students do not plan on making changes to their international studies.
Noting the financial importance international students have for post-secondary institutions, Basiri sees the recruitment sector growing post-COVID. “More and more universities are wanting to diversify their student body, more and more universities are going to be diversifying for their financial needs,” he said.
Social distancing measures have seen most post-secondary institutions move students out of residences, creating challenges for international students to either find new places to stay locally or get back home. Universities have also faced challenges moving online, with Basiri noting that ApplyBoard saw an influx of thousands of inquiries from students and institutions alike.
ApplyBoard has recently worked with government and university bodies to ensure that international students are not left behind in emergency measures. While the Canadian government had originally been criticized for leaving international students out of measures, it later removed restrictions, allowing international students to work 20 hours per week while classes are in session.
“In the long term, I think [this crisis] would be very positive for our industry.”
“In the long term, I think [this crisis] would be very positive for our industry,” said Basiri. “Because now that the universities can also do online, in the future this gives them a huge flexibility of delivering programs both offline and online or in a hybrid manner. I think this is very positive for our industry.”
ApplyBoard plans to use its newfound capital to “invest heavily” in its technology, with the goal of serving more customers. The startup recently launched in the United Kingdom, announcing the move on March 30. Basiri told BetaKit ApplyBoard is looking to use a portion of the $100 million to strengthen its position in that region.
The move follows shortly after the company saw Jo Johnson, the brother of current United Kingdom (UK) prime minister Boris Johnson, join as chairman of its advisory board. A former member of parliament himself, Jo served as minister of state for universities, science, research, and innovation.
ApplyBoard also plans to grow its team. The startup has been scaling quickly, expanding its team from 180 in May 2019 to around 400 employees now. The company spans 20 countries, with around 300 of those employees working out of the startup’s Kitchener-Waterloo office.
With this latest funding round, ApplyBoard plans to bring on at least 100 more employees. Basri noted that the majority of those positions are currently open.
“The whole company started because of [mine and my brother’s] personal experience,” said the CEO. “We are really happy that we can support more and more people to be able to get a good education … our campaign is to build a better future for people and I’m so happy that in our life we can have a positive reinforcement on that.”
Basiri highlighted that ApplyBoard’s goal is to make education accessible for students around the world and feels like it is well-positioned to help the international recruitment sector during COVID-19.
Image courtesy ApplyBoard