Equity analysis startup Canalyst raises $20 million Series B

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Canalyst, a Vancouver-based startup offering equity research for capital markets, has closed a $20 million Series B. This brings Canalyst’s total funding to $28 million.

The round was led by an undisclosed investor, and received additional commitments from ScaleUP Ventures and existing investors such as Vanedge Capital. The startup said the new capital will be spent on recruiting new talent in the areas of product enhancements and client service.

“Canalyst provides investment firms invaluable access to accurate and granular financial data.”
– John Montalbano

Canalyst was founded in 2015 by a former Fidelity analyst, James Rife, who built the first version of the product for himself. This personal tool for analyzing stocks quickly picked up interest from institutional investors. The platform now serves asset managers globally, including analysts, portfolio managers, directors of research, and founders, who use the company’s data to inform their research.

The platform’s library of equity models includes the S&P 500, Russell 2000, TSX, and TSX Venture Exchange, in addition to more small- and mid-cap indices. Financial modelling involves building an abstract representation, or a model, of a real-world financial situation. Canalyst leverages both humans and software to create its financial models. Its equity research team comprises over 40 people, who have built over 4000 fundamental models in Canalyst’s North America database. Along with the research team, Canalyst also has an engineering team that maintains the cloud-based software product and its infrastructure.

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Canalyst’s models, which include valuation metrics, margin analysis, and revised income statements, are built directly from company filings. The models are updated quarterly when new data is released, if a restatement is issued, and whenever a significant merger or acquisition occurs.

“Canalyst provides investment firms invaluable access to accurate and granular financial data that flexibly incorporate into their analysis in a manner that lowers costs, expands addressable market coverage, and increases the speed of execution,” said John Montalbano, Canalyst’s chairman.

The employee headcount at Canalyst currently sits at 100, across offices in Vancouver and New York, and the platform is currently used by 400 clients. The startup previously raised a $2.7 million seed round in 2016.

Image source Unsplash. Photo by Spencer Watson.

Isabelle Kirkwood

Isabelle Kirkwood

Writer, globetrotter, drone pilot & David Attenborough enthusiast