S|W: The SaaS Weekly – Constellation wants underperforming Canadian companies

Plus: NowVertical resolves dispute with founder and Reddit’s big debut.

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Constellation Software looks to ‘experiment’ by buying Canadian VC-backed companies

Constellation Software has a message for Canadian venture-capital backed software companies that are no longer on a trajectory to reach US$1-billion “unicorn” valuations and struggling to raise funds: Come join our galaxy.

The acquisition machine, one of Canada’s most valuable companies, usually buys businesses from founders or large corporations. But it is now also “looking for venture capital-backed businesses that did not live up to investors’ or founders’ expectations, companies that are running out of options,” said Farley Noble, senior vice-president of Constellation’s large investment group, in an interview. “We would like to help them.”

(The Globe and Mail)

Sonder faces class action investigation after delaying financial results due to errors in past statements

Montréal-founded, San Francisco-headquartered Sonder, which leases and manages a portfolio of short-term rental units, has announced that it is delaying the release of its fourth quarter and full year 2023 financial results.

After Sonder’s announcement, shareholder rights law firm Johnson Fistel, LLP released its own statement announcing it was commencing a class action investigation into whether Sonder or any of its executive officers or others violated securities laws by “misrepresenting or failing to timely disclose material, adverse information to investors.”


Reddit’s debut delivers for new and old shareholders alike

Touting its plan to profit from the growth of artificial intelligence, Reddit’s shares climbed 48 per cent in its trading debut Thursday after pricing at the top of a marketed range to raise US$748 million in the fourth-largest U.S. IPO of the year.

“What we’re seeing today is Reddit reaping the benefits of being a first mover after a lengthy IPO drought,” said Saar Gur, a general partner at venture firm CRV, which isn’t an investor in Reddit. “There’s value, regardless of how rock solid a company is, of being the first company out because you’re going to get a lot of attention and chatter about the market as a whole.”

The returns realized by Reddit’s stockholders will be a focal point for those deciding whether to pursue IPOs of their own.

(BNN Bloomberg)

Top Hat’s Maggie Leen appointed CEO two months after Joe Rohrlich’s quiet departure

Toronto-based online education firm Top Hat has tapped its former CMO, Maggie Leen, to lead the company as CEO.

The appointment comes roughly two months after BetaKit was first to report that Top Hat’s CEO Joe Rohrlich and CRO Matt Schurk had quietly departed the EdTech company.

In a statement announcing her appointment, Top Hat said Leen was “instrumental in shaping the company’s corporate and go-to-market strategy” during her tenure as CMO.


Dye & Durham targeted by activist investor Engine Capital

Dye & Durham Ltd. is the latest target for New York activist investment firm Engine Capital LP, a hedge fund that pushes for changes at companies it believes are undervalued.

The acquisitive, heavily indebted legal software provider said in a release Friday evening that it had received a letter requisitioning a meeting of its shareholders from the 11-year-old hedge fund, and that it would review and consider the request before commenting further.

(The Globe and Mail)

NowVertical resolves dispute with founder, shareholder Daren Trousdell

Toronto-based data company NowVertical has announced changes to its board of directors following a recent dispute with its founder, former CEO, and shareholder, Daren Trousdell.

NowVertical said its dispute with Trousdell, who called for NowVertical’s board to be replaced in January, is now resolved. As part of the resolution, NowVertical said the company and Trousdell have agreed to settle and dismiss all ongoing legal proceedings, and have agreed to “certain voting and standstill provisions to preserve alignment between them moving forward.”


In HR Software Battle, Rippling Makes Up Ground Against Deel—At a Cost

Rippling, a human-resources software startup valued at more than $11 billion, was a relative latecomer to the business of helping companies hire staff overseas.

The eight-year-old startup’s annual recurring revenue roughly doubled to more than $350 million by the end of 2023 compared with a year earlier.

That growth comes at a cost: The company is burning about $100 million a year.

The increase in revenue also means Rippling’s most recent $11.25 billion valuation is closing in on a multiple of revenue similar to the valuation of Deel, a venture-backed rival that also provides HR software and payroll services. That improvement should help Rippling as it inches toward an eventual initial public offering.

(The Information)

CDPQ’S $250-million Equity 25³ Fund is done after only four investments

Less than three and a half years after launching the largest Canadian fund of its kind, Caisse de dépôt et placement du Québec has quietly shuttered Equity 25³, BetaKit has learned.

At the time, CDPQ dedicated $250 million CAD towards increasing diversity and inclusion through Equity 25³ and claimed it was “the largest Canadian fund ever created to target companies leveraging diversity as a vector of development and expansion.”

BetaKit has learned that Equity 25³ made just four investments in that timeframe. Meanwhile, Wils Théagène, formerly a senior director of private equity at CDPQ and the architect of Equity 25³, is no longer with CDPQ or the fund.

“With my next venture, I wanted to address the gap at [Series] A and then move up [and] continue to do growth,” said Théagène, who claimed that CDPQ’s Equity 25³ has now given him “the recipe” for his next fund.


The Browser Company raises $50M at a $550M valuation

The Browser Company, which makes the Arc browser, has raised $50 million in a round led by Pace Capital at a $550 million valuation, TechCrunch has learned exclusively.

The company’s head of storytelling, Nashilu Mouen, confirmed the investment to TechCrunch.

“Now, more than ever, we continue to believe that the successor to the personal computer (PC) is imminent. And it starts in the browser. We’ll see you there,” Mouen said in a statement.


The BetaKit Keynote Stage lands in Vancouver for INNOVATEwest 2024

The BetaKit Keynote Stage is heading west, set to host captivating conversations with tech leaders at INNOVATEwest 2024.

On April 16 and 17 at the Vancouver Convention Centre, the stage will feature a roster of tech luminaries, including Canva chief evangelist Guy Kawasaki, key figures from Canada’s quantum sector, and a lively conversation between Koho founder and CEO Daniel Eberhard and Wealthsimple co-founder and CEO Michael Katchen.


From Soda Sales to Software Success: Chantelle Little’s Journey to Founding a Top Web Agency

Chantelle Little knew she loved entrepreneurship well before she understood anything about brand, SaaS or the technology sector.

Spurred on by the entrepreneurial glimmer of her youth, startup funds leveraged from a university scholarship, and the ambition to change the way video content and branding agencies deliver, the then 19-year-old launched what would become one of North America’s few SaaS, and software-focused, B2B brand agencies, Tiller.


Proptech startup Landerz plots a course for growth with $1.5-million CAD seed round

Montréal-based proptech startup Landerz has closed a $1.5-million CAD round of seed funding to develop and expand its public real estate platform.

Landerz, co-founded by Nadine Fournier and Simon G. Boyer, operates an online platform to simplify land transactions for sellers, brokers, and land developers. The platform aggregates environmental and economic data about land plots in a navigable map format.


Feature image courtesy Pascal Debrunner via Unsplash.

Alex Riehl

Alex Riehl

Alex Riehl is a staff writer and newsletter curator at BetaKit with a Bachelor of Journalism from Carleton University. He's interested in tech, gaming, and sports. You can find out more about him at alexriehl.com or @RiehlAlex99 on Twitter.

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