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Boardroom drama and a new CEO at NowVertical
Toronto-based data company NowVertical named Sandeep Mendiratta as its new CEO, replacing Sasha Grujicic, who joined as COO in early 2022 before being named president and CEO in 2023.
While NowVertical has been focused on growth through buying companies, having made more than 10 acquisitions since its inception, its board determined that the company “had not maximized the expected benefit” from these acquisitions.
On Thursday evening, NowVertical’s largest shareholder, Daren Trousdell, called on the board to resign. Trousdell claimed that the board is directly responsible for the erosion of NowVertical’s balance sheet, and that if he “had been permitted to vote his conscience for the benefit of all shareholders,” he would not have re-elected the board at an annual meeting in October 2023.
The board responded just over an hour later, reminding Trousdell of the separation agreement he signed after resigning as a director of the company in May 2023, and publicly informed him they will be bringing legal proceedings forward “to put an end to these distractions.”
“Unfortunately, Mr. Trousdell has taken the position that he is not bound by his commitments,” the board’s statement reads.
(BetaKit)
Investors raise billions to buy discounted stakes in start-ups
Investment firms are raising billions of dollars to buy stakes in venture capital-backed technology start-ups, as a long drought in acquisitions and initial public offerings forces early investors to offload their stock at discounts.
Secondary market specialist Lexington Partners last week announced a new $23-billion fund to buy up stakes from “large-scale investors”. Lexington had originally aimed to raise $15 billion, but upped its target on the back of high demand, and said it was “in the early stages of a generational secondary buying opportunity” that could last years.
“We are seeing crazy amounts of [limited partner investors] that are distressed and need to lighten their venture load,” said the head of a $2-billion venture capital firm.
Software acquirer Valsoft closes $229 million CAD in growth financing
Valsoft Corporation, a Montréal-based firm that acquires and scales vertical software companies, has closed $229 million CAD in growth funding as it looks to expand its portfolio.
Valsoft follows a similar business model to Constellation Software in which it acquires vertical software companies, with nearly 100 companies from 50 countries stacked in its portfolio.
In a statement, Sam Youssef, Valsoft CEO and co-founder, claimed the firm had more than doubled its business in the last two years, and is now entering a new phase of growth. It’s also mulling plans for an IPO.
(BetaKit)
7shifts cuts 19 percent of staff in new layoffs to start 2024
Saskatoon-based startup 7shifts has recently laid off 68 employees as part of a push to become more efficient, BetaKit has learned.
These layoffs, which occurred on January 11, impacted 19 percent of the restaurant software firm’s workforce. They marked 7shifts’ second round of cuts in the past four months after the company reduced its headcount by seven percent in September to “right-size” its business.
(BetaKit)
Thomvest Ventures closes $250M fund to invest across fintech, cybersecurity, AI
Thomvest Ventures announced it closed a new $250 million fund and promoted Umesh Padval and Nima Wedlake to the role of managing directors. Started 25 years ago by Peter Thomson, whose family is the majority owner of Thomson Reuters, Thomvest has backed Canadian startups like Traction Complete, Evidence Partners, and Plum.
Thomvest Ventures deploys its capital in the areas of financial and real estate technology, cybersecurity, cloud, and AI/data infrastructure. The fund expects to invest in between 25 and 30 companies with check sizes ranging $5 million to $15 million for early-stage and $7 million to $25 million in the later stage.
#CDNtech CEO shakeups continue
There has been a growing tidal wave of leadership changes at Canadian tech companies and organizations that began at the end of 2023.
Some CEO replacements were expected as part of a substitution process following the retirement of previous leaders, such as with MaRS Discovery District in December and MindBridge this week, while others opted to retire or were forced out.
Just this past week, ActiveState, AnalytixInsight, Acuity Insights, Volaris Group, and Flashfood have all experienced transitions at the CEO level.
(BetaKit)
Digital Onboarding grabs $58M to help banks with profitable customer engagement
Digital Onboarding, a SaaS company specializing in helping financial institutions strengthen relationships with customers, secured $58 million in growth capital from Volition Capital to continue developing its digital engagement platform.
Digital Onboarding’s technology provides banks and credit unions with a digital aspect to the paper welcome kit in the form of targeted, journey-based communication and action-oriented microsites.
One of the cofounders described the deal as “opportunistic.”
GrowerIQ acquires cannabis tech competitor Ample Organics from US-based Akerna
GrowerIQ has made its first acquisition, purchasing fellow cannabis software provider Ample Organics from the latter’s American owner, Akerna, as the cannabis sector struggles post-boom.
The strategic, all-cash deal, which closed in December, brings the two Toronto-based cannabis production management competitors together and returns Ample to Canadian ownership three and a half years after it was acquired by Akerna.
(BetaKit)
Exclusive: Reddit seeks to launch IPO in March
Social media platform Reddit has drawn up detailed plans to launch its initial public offering (IPO) in March, moving forward with a listing it has been eyeing for more than three years, according to people familiar with the matter.
The San Francisco-based company, which was valued at about $10 billion in a funding round in 2021, is seeking to sell about 10 percent of its shares in the IPO and will decide on what IPO valuation it will pursue closer to the time of the listing.
(Reuters)
Vistara Growth bets on two US-based supply chain software companies
Vancouver-based Vistara Growth added to its US portfolio, investing in two companies that offer artificial intelligence-based supply chain solutions for the retail and consumer packaged goods sectors.
Vistara invested $20 million USD into Michigan-based Algo and participated in a $40-million USD growth financing round for Maryland-based Impact Analytics. According to Vistara partner Noah Shipman, Algo is the first of three deals it has already closed from its fifth private credit fund, for which it recently closed $200 million.
(BetaKit)
Databricks Preps Employee Share Sale
Databricks, one of the most valuable of the private tech companies, told employees last week it is planning to allow early staffers to cash out some of their shares in the coming months by lining up investors to buy their stock, people familiar with the matter said.
Databricks is following in the footsteps of other private tech companies that have run large tender offerings in recent months to allow employees to sell shares, including design software firm Canva, payments giant Stripe, and Elon Musk’s rocket company, SpaceX.
In doing so, these companies put off the need to go public anytime soon.
Springdel closes $5 million as it looks to bring automation to mobile device management
Toronto-based mobile device management startup Springdel has secured $5 million in Series A financing to drive product development, specifically around artificial intelligence and declarative device management.
Springdel developed Springmatic, a platform that allows enterprises to control, secure, and enforce policies on various mobile devices to ensure they are used safely, efficiently, and in compliance with company policies.
(BetaKit)
Bot management software startup Wysdom acquired by US-based Calabrio
Toronto-based Wysdom, which provides software and services to improve artificial intelligence-powered virtual agents, has been acquired by Minneapolis, Minn.-based Calabrio.
Both companies operate in a similar space. Wysdom aims to help chatbot operators improve the performance of their virtual agents, while Calabrio provides a suite of solutions for customer support centres.
(BetaKit)
The Quiet Death of Ello’s Big Dreams
Ello launched on August 7, 2014 with big dreams and big promises, a new social network defined by what it wouldn’t do.
From its launch, Ello defined itself as an alternative to ad-driven social networks like Twitter and Facebook. Its manifesto ended with the line: “You are not a product.” Now, it seems to have surreptitiously died.
(Waxy)
