XMachina AI acquires Bain Public in its second acquisition since forming in mid-2021

XMachina specializes in AI acquisitions, and is preparing for an IPO.

XMachina AI Inc. has acquired Bain Public Inc. for an undisclosed amount of cash and shares. The latter are set up to vest over time.

XMachina is a Montréal-based firm that specializes in the acquisition of artificial intelligence (AI) companies.

XMachina said it’s planning a pre-IPO round with a target of $4 million and is contemplating a follow-up round of $6-to-$7 million.

Bain Public is a management consulting firm that provides planning processes and tools for product leadership teams in the software ecosystem.

XMachina claims to acquire AI startups, and improve them through the addition of growth capital as well as through the “streamlining of corporate processes, and human capital acquisitions.” The startup’s current sector focus is on enhancing supply chain efficiencies, logistics, and manufacturing.

In particular, XMachina is looking for AI product companies in construction, manufacturing and logistics that are currently profitable or near break-even, and with annual recurring revenue of $500,000 or more. The startup is also looking to acquire AI talent as it grows.

Patrick Brown, XMachina’s CFO, told BetaKit that it would not disclose the cost of the acquisition as the startup is in the middle of negotiating another couple of deals.

XMachina has made one other acquisition in its brief time, Coindera, a company that monitors cryptocurrencies. Brown called that deal an acqui-hire.

“We see the Bain Public acquisition as part of a strategic growth strategy for XMachina,” said Claude Theoret, CEO of XMachina.” We have an opportunity to grow XMachina revenues through the continued development of the Bain Public brand while adding a layer of in house product expertise for the targets that we acquire.”

Bain has five staff, all of whom are joining XMachina. Theoret said, going forward, XMachina is funding Bain. “We have a development plan to expand Bain into Toronto, Ottawa, Quebec City in the next year,” he said.

Founded in the spring of 2021, XMachina currently has five founders, and a vice president of operations.

Before forming XMachina, Theoret founded and left Nexalogy, which he claims was one of Montréal’s first AI companies. A former astrophysicist, he has done “deep” AI-driven political and military intelligence work and has a secret level clearance with the Canadian Armed Forces, according to his biography.

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Daniel Drouet, XMachina’s CTO and CPO, is a founding partner of Real Ventures. Founded in 2007, Real is one of the most active early-stage VC firms in Canada. Based in Montréal with five funds under its belt, Real has raised $325 million in capital and invested in more than 200 companies, playing a key role in developing Montréal’s startup ecosystem.

Drouet claims to have helped grow Anges Québec into one of the largest angel investor networks in the country. He is currently an entrepreneur-in-residence at Centech, a deeptech and AI-focused accelerator.

In late December 2021, XMachina closed an oversubscribed seed round. Initially slated for $2 million, the round topped out at $2.4 million. XMachina plans to use the funds to complete a listing process on the Canadian Securities Exchange, close acquisitions, and for general working capital requirements. Hampton Securities and Echelon Wealth Partners led the round, with additional funding from undisclosed investors.

XMachina said it’s planning a pre-IPO round with a target of $4 million and is contemplating a follow-up round of $6-to-$7 million. The firm claims Hampton Securities will lead the pre-IPO round as well. The holding company is currently preparing its public listing filing requirements.

Feature image by Gerd Altmann via Pixabay

Charles Mandel

Charles Mandel

Charles Mandel's reporting and writing on technology has appeared in Wired.com, Canadian Business, Report on Business Magazine, Canada's National Observer, The Globe and Mail, and the National Post, among many others. He lives off-grid in Nova Scotia.

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