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B.C.’s stable of unicorns grows as Trulioo raises record US$394m

Funding round breaks previous record for biggest venture capital deal in Canadian history
Trulioo employees gather at the office prior to the pandemic | submitted

B.C.’s tech sector has added another unicorn to its growing stable of companies valued at $1 billion or more.

Vancouver-based Trulioo Information Services Inc.’s valuation is now pegged at US$1.75 billion ($2.11 billion) following the close of a record-setting Series D funding round.

The latest raise, announced Monday, is bringing in US$394 million in fresh capital — an amount surpassing the US$305 million raised by Vancouver’s Dapper Labs Inc. back in March.

Dapper Labs’ raise was already the largest venture capital deal in Canadian history, according to a May analysis from CPE Analytics.

The funding round for Trulioo — best known for specializing in online identity verification — was led by American investment firm TCV (TCMI Inc.), with participation from existing investors Amex Ventures, Citi Ventures, Blumberg Capital and Mouro Capital.

TCV isn’t a stranger to the B.C. tech community, having participated in Burnaby-based legal-tech firm Clio’s (Themis Solutions Inc.) US$250-million Series D funding round in 2019

Trulioo CEO Steve Munford said through a spokeswoman he didn't have the bandwidth to do an interview in the four days leading up to Monday’s announcement.

The company declined BIV's request to interview another executive about the funding round.

In a prepared statement, Munford said the new capital would “accelerate our goal to become an end-to-end identity platform.”

The close of Trulioo’s funding round is just the latest in a string of giant raises that would have been rather uncharacteristic for B.C.’s tech ecosystem just a year ago.

On top of Dapper Labs’ recent US$305 million raise, Bench Accounting Inc. revealed on Thursday the close of a US$60-million round.

This was preceded by Dooly Research Ltd.’s US$80-million raise in May, Clio’s US$110-million raise in April and Tasktop Technologies Inc.'s US$100-million raise that same month.

A $30-million raise — the sum brought in by health-tech firm PocketPills Inc. back in March — would have been quite significant within the B.C. tech community only a year ago. But those figures are being increasingly dwarfed in comparison to other funding rounds announced in 2021.

“Major tech hubs in the U.S. are becoming less central. And there's sort of an exodus [from Silicon Valley],” said Bench CEO Ian Crosby, whose company develops software to help automate accounting tasks for about 11,000 businesses globally.

“There was sort of this halo of: 'You're in Silicon Valley, then you must be doing something right and your technology was somehow more innovative just because you were there.'”

He said serious investors have been looking deeper at the fundamentals of tech companies rather than relying on some of the buzz generated within Silicon Valley.

The result is that more attention is being turned to tech hubs such as Vancouver.

And since February, a steady stream of unicorns has been emerging from the B.C. tech ecosystem after only a few rare sightings in prior years.

Galvanize (ACL Services Ltd.), GeoComply Solutions Inc., Thinkific Labs Inc. and Clio (Themis Solutions Inc.) all publicly acknowledged reaching unicorn status this year either through being acquired, locking in additional investments or else by going public.

Dapper Labs did not publicly reveal its valuation but media reports — and the sheer size of its US$305-million raise — suggest the Vancouver company is now a unicorn.

David Raffa, president of Valeo Corporate Finance Ltd., said the local ecosystem is benefitting from private equity firms swimming in cash amid the pandemic, while credit markets are wide open and interest rates are at record lows.

“You build a dam dependent on a river and the water is piling up, piling up, piling up. Then the dam bursts. And so that’s what happened,” Raffa, whose Vancouver-based firm provides services for mergers and acquisitions and initial public offerings, told BIV in April.

Access to top-tier universities and the large talent pool paid in Canadian dollars at lower comparable salaries than their American counterparts have been particularly enticing, he added.

Brent Holliday, CEO of Vancouver-based Garibaldi Capital Advisors Ltd., said the local tech sector had been held back to a certain degree owing to the lack of available talent based in the city in years past.

“Getting big financings in companies like Hootsuite [Inc.], BuildDirect [.com Technologies Inc.], etc., 10 years ago helped fuel a broader talent pool we have,” he told BIV last month.

“At some point, this will turn. … Inflation comes back, the stock market gets killed, the exits sort of peter out because the IPO market dries up, the M&A people sort of start to hoard their cash and wait. That inevitably will happen, but for now, for the next 12 months in front of us at least, I see us being very busy.”

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