U.S. private-cap giant Tiger Global Management has hammered another Canadian startup, making its seventh investment here this year and extending a banner year for BC technology companies.
Tiger’s latest deal is a US$62 million venture capital fund from Vancouver-based Clue Labs Inc. This is the third transaction Tiger has led or co-led this fall in Canada, along with deals from Float Financial Solutions and Get Rescue Ltd.
Clue sells artificial intelligence-powered business intelligence software for sales professionals to gather information about competitors, and better prepare them to win deals. Its platform, which automatically retrieves information from the Internet as well as internal systems such as Slack and e-mail, competes in a new category known as “competitive enablement.” Klue’s customers include Dell, Red Hat, SAP, Workday, 3M and Shopify. Its rival is Boston startup Crayon Inc., which this year raised US$22 million in venture capital.
Clue, co-founded by Chief Executive Officer Jason Smith and Chief Technology Officer Sarathi Naykar, has tripled its client base since the summer of 2020, raising US$15 million for over 300 clients. It is ranked 12th on Deloitte’s latest list of the fastest growing Canadian technology companies, with 2,418 percent revenue growth from 2017 to 2020. The annual revenue has exceeded 10 million US dollars.
Clue has tripled its head count to 142 employees since the start of the pandemic, and plans to double that again with funding as it seeks to expand sales in Europe and the Asia-Pacific region.
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Several previous investors at Clue said that holding Tiger as a funder effectively anoints him as an early winner in the space, even if it deterred him from investing in the latest deal. (Mr. Smith got Salesforce Ventures to participate as a strategic investor after Tiger offered an all-round bankroll.)
“This is proof that Jason is conquering this market,” said Lars Leckie, managing director of Aspenwood Ventures in San Francisco. Plan.”
New York-based Tiger is renowned for doing extensive upfront research on fast-growing startups it wants to back, then leaping at the opportunity to invest, usually before seeking financing. Tiger offers “founder-friendly” terms for those who believe they can rise to market leaders, including big dollars at rich valuations, fast closing times, and no need for board seats or other conditions. There are no requests for loans that are usually sought by venture capitalists. While many VC firms have teams to help portfolio companies with strategy, recruitment and other initiatives, Tiger outsources those tasks to consulting and headhunting firms and sticks to investments.
“They find who they believe is the category winner, they aggressively back them with money to set themselves apart from the pack, and they go out of the way,” Mr. Smith said in an interview. . “They’re moving to the right deals that are going to exceed market returns, but move very quickly.”
With money flowing into technology companies globally, Tiger is also putting upward pressure on technology employee salaries at a time of rising inflation, Mr. Smith acknowledged. “There’s a lot of money in there,” he said. “It’s rapidly increasing companies’ balance sheets, and people are getting paid more. … We’ll try to hire 150 more people. They’re all gainfully employed elsewhere. Me. Sounds like it will contribute to easing inflation, which will make it harder on some of the smaller companies… but we’re also competing with the Amazon and Netflix of the world.”
Klue extends a record year for Canadian startups. According to Refinitiv, Canadian companies have raised $12.4 billion in venture capital so far this year, up nearly 25 percent from the previous full-year record, adjusted for inflation, set in 2020.
The deal, along with funding announced Tuesday for BC Fusion energy developer General Fusion, also extends a banner year for BC companies. Several, including Blockstream, Geocomplete, Dapper Labs, Trulio and Clio, have reached “unicorn” status by achieving a valuation of US$1 billion, while four BC technology companies – MDA, Telus International, Copperleaf Technologies and Thinkific Inc. – go public. are gone. Toronto Stock Exchange.
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