Toronto-based Beacon Software has closed $250 million in Series B financing to purchase smaller, niche software and services firms, embed artificial intelligence (AI) into them, and grow them over the long run.
The AI holding company claims that it has already acquired and partnered with dozens of software and services companies—across areas like education, finance, logistics, and recreation—since its launch last year. More than 30 percent of them have been Canadian. This group includes Saskatchewan’s Let’s Camp, an online platform to connect campers to campgrounds.
Nilam Ganenthiran,
“I realized Main Street businesses everywhere need to be equipped for the technology revolution ahead.”
Beacon Software
Not to be confused with the Toronto and Montréal FinTech startup of the same name, Beacon’s AI rollup strategy is reportedly to target profitable, self-funded firms in sectors often overlooked by major tech investors and equip them with a new AI software stack.
Beacon provides portfolio businesses with a shared platform of tech, design, FinTech, and go-to-market capabilities, as well as access to an advisory community of leaders from Instacart, Meta, OpenAI, and Shopify. The company plans to use its Series B capital to fund more acquisitions and scale its centralized tech capabilities.
The round was co-led by General Catalyst, Lightspeed Venture Partners, and D1 Capital. BDT & MST Partners, Instacart CEO Chris Rogers, and Sator Grove also participated, alongside existing backers including Mantle co-founder and CEO Amar Varma and OpenAI applications CEO and Shopify board member Fidji Simo. It brings Beacon’s total funding to $335 million and reportedly values the company at $1 billion.
BetaKit has reached out to Beacon for additional comment regarding the financing, the company’s acquisition strategy, and its progress to date.
Beacon was founded last year by CEO Nilam Ganenthiran and CTO Divya Gupta. Genenthiran is a Canadian who previously served as president of Instacart and partner at D1 Capital, while the American Gupta is a former Sequoia Capital partner and Databricks software engineer. In a statement, Ganenthiran said they launched the company to “transform the industries that quietly power our everyday lives.”
“After nearly a decade helping grocers modernize at Instacart, I realized Main Street businesses everywhere need to be equipped for the technology revolution ahead,” he said. “By pairing the deep expertise of the entrepreneurs we back with Beacon’s AI and technology capabilities, we are helping industries modernize while protecting the legacy of the teams who built them.”
Beacon claims its portfolio companies already serve thousands of enterprise customers, employ hundreds of thousands of people, and support more than one million active users.
Unlike traditional private equity, Beacon claims that its plan is not to chase short-term results and sell over three to five years but to foster “efficient and durable growth over decades” with the help of its team, more than two-thirds of which is Canadian.
Feature image courtesy Beacon Software.