CDPQ invests $100 million CAD in AppDirect channel partner program

Through AppDirect Capital, the startup aims to help tech advisors using its platform grow.

AppDirect has announced a new $100 million CAD ($80 million USD) commitment from Caisse de dépôt et placement du Québec (CDPQ) to support the growth of channel partners using its subscription commerce platform.

The San Francisco-based startup, which has deep Canadian roots, plans to use this funding to establish a new overarching funding arm called AppDirect Capital. Through AppDirect Capital, AppDirect will support the growth of its existing AppSmart Invest program, which provides capital to its technology advisor channel partners.

CDPQ previously led AppDirect’s $185 million USD September 2020 funding round, supporting the San Francisco firm’s Montréal expansion efforts.

CDPQ previously led AppDirect’s $185 million USD September 2020 funding round. Since then, the Québec pension fund has supported AppDirect’s efforts to expand its business in Montréal, where it has a significant presence.

Founded in 2009 by two Canadians, co-CEOs Nicolas Desmarais (of the family behind Power Corp) and Daniel Saks, AppDirect provides a cloud-based subscription commerce platform that connects channels, developers, and customers.

The startup aims to simplify the digital supply chain by facilitating the onboarding and sale of products with third-party services.

Saks said that through this CDPQ investment and AppDirect Capital, AppDirect will be able to support the growth of its tech advisor channel partners by bolstering AppSmart Invest and building new financial products to help its channel partners grow.

AppSmart, a division of AppDirect, offers a B2B tech marketplace that allows companies and tech advisors to find, buy, and manage tech services including telecommunications, cloud, and other business services.

In February, AppSmart launched AppSmart Invest, a new funding program dedicated to helping tech advisors using its marketplace scale their recurring revenue businesses.

RELATED: AppDirect closes $185 million led by Caisse de dépôt et placement du Québec

A spokesperson for AppDirect told BetaKit that AppSmart Invest “is not a loan or credit product,” but rather, “a direct investment into the growth of AppSmart channel partners that does not require equity or repayment.” The program provides these channel partners with upfront capital based on their recurring revenue commissions.

Saks said AppDirect’s network of tech advisors has seen “unprecedented demand for cloud and connectivity in recent years.”

According to AppDirect, one of the biggest challenges its merchant community faces is accessing funding from traditional banks. AppDirect decided to roll out AppDirect Capital to address this issue and help its channel partners grow.

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Through the program, AppDirect claims that its channel partners gain access to a “faster, less onerous, alternative to traditional M&A.” Tech advisors who participate in the AppSmart Invest program maintain ownership and control of their businesses.

To date, AppSmart Invest has served firms like Global Communications Group, NXTSYS, On Track Communications, US Network, PSI Network, and Netstar Communications.

“As a long-term partner who supports promising technology companies at all stages of maturity and across asset classes, this complementary investment in the AppDirect Capital program reflects CDPQ’s conviction that new technology business models, such as subscription-based services and platforms, can fuel and sustain performance over the long term,” said Alexandre Synnett, executive vice-president and CTO of CDPQ.

AppDirect plans to expand and fund additional capital products “in the near future.”

Feature image from AppDirect

Josh Scott

Josh Scott

Josh Scott is a BetaKit reporter focused on telling in-depth Canadian tech stories and breaking news. His coverage is more complete than his moustache.

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