CDPQ invests $136 million CAD into AppDirect financing program for tech advisors

Investment builds on initial $100 million AppDirect received from the pension fund in 2021.

Canadian-founded, San Francisco-based AppDirect has secured $136 million CAD ($100 million USD) from existing investor Caisse de dépôt et placement du Québec (CDPQ) to expand its AppDirect Capital program.

Through AppDirect Capital, AppDirect provides non-dilutive funding to technology advisors using its platform that are looking to grow. The business-to-business commerce software company plans to use this CDPQ investment to offer them more “innovative financing options.”

CDPQ has been a supporter of AppDirect for years since leading its nearly $250-million financing in late 2020.

AppDirect chair, co-founder, and CEO Nicolas Desmarais told BetaKit that this CDPQ funding comes in the form of “a debt fund to support AppDirect Capital,” confirming that it is all going directly towards the initiative. This investment builds on the initial $100 million AppDirect received from the Québec pension giant to launch AppDirect Capital in late 2021.

In a statement, Desmarais noted that CDPQ and AppDirect “have an established track record of working together.” Per the CEO, “this new investment further solidifies both companies’ commitment to the growth and transformation of AppDirect channel partners and technology advisors.”

Founded in 2009, AppDirect provides software designed to simplify the way companies buy, sell, and manage recurring tech services. The company claims that today, more than 1,000 providers, 10,000 advisors, and five million subscribers use AppDirect, including ADP, Coupa, Intuit, and Vodafone.

The San Francisco-headquartered software firm has deep Canadian roots: Desmarais (of the billionaire Desmarais family behind Power Corporation, a major shareholder in a variety of prominent Canadian tech startups) and fellow AppDirect co-founder Daniel Saks both hail from Canada, and the firm has a strong presence here, with offices in Montréal and Calgary.

“AppDirect has long recognized the Québec province’s talent and potential,” said Desmarais. “AppDirect continues to demonstrate this commitment with our official Canadian headquarters located in Montréal and our largest team within North America also located within Québec.”

RELATED: CDPQ invests $100 million CAD in AppDirect channel partner program

Via AppDirect Capital, the company provides recurring revenue channel partners with flexible capital to scale, innovate, hire, or make outside investments while retaining full ownership of their businesses. AppDirect did not disclose how many tech advisors have leveraged the program to date since its launch in 2021.

CDPQ has been a supporter of AppDirect for years, leading the company’s nearly $250-million CAD ($185 million USD) financing in late 2020, which reportedly came at a post-money valuation of more than $2 billion, before investing in AppDirect Capital in 2021.

“Since our initial financing in 2021, AppDirect has demonstrated their ability to accelerate the connectivity and competitiveness of today’s businesses,” CDPQ executive vice president and head of fixed income Marc Cormier said in a statement. “As part of our partnership, this repeat investment continues to facilitate the delivery of critical solutions for the digital economy, while generating stable returns for our clients.”

RELATED: Vooban secures CDPQ investment to fund acquisitions and North American expansion

Over the past year, AppDirect acquired Telecom Brokerage Inc., purchased assets from ADCom Solutions, and announced the development of an artificial intelligence marketplace.

Speaking about how today’s challenging tech and broader market conditions have impacted AppDirect, Desmarais argued that “businesses that invest in the right technology and automation and build on scale are the organizations that will thrive and outlast any economic downturn.”

In this context, Desmarais called many of the services sold through the firm’s technology catalogue “table stakes,” noting that lots provide advisors with solutions for end customers that are more cost effective or efficient—a particularly compelling selling point in the current environment.

Feature image courtesy 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. He was also the winner of SABEW Canada’s 2023 Jeff Sanford Best Young Journalist award.

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