Tag Archives: Canada

Nuula raises $120M to build out a financial services ‘superapp’ aimed at SMBs

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A Canadian startup called Nuula that is aiming to build a superapp to provide a range of financial services to small and medium businesses has closed $120 million of funding, money that it will use to fuel the launch of its app and first product, a line of credit for its users.

The money is coming in the form of $20 million in equity from Edison Partners, and a $100 million credit facility from funds managed by the Credit Group of Ares Management Corporation.

The Nuula app has been in a limited beta since June of this year. The plan is to open it up to general availability soon, while also gradually bringing in more services, some built directly by Nuula itself and but many others following an embedded finance strategy: business banking, for example, will be a service provided by a third party and integrated closely into the Nuula app to be launched early in 2022; and alongside that, the startup will also be making liberal use of APIs to bring in other white-label services such as B2B and customer-focused payment services, starting first in the U.S. and then expanding to Canada and the U.K. before further countries across Europe.

Current products include cash flow forecasting, personal and business credit score monitoring, and customer sentiment tracking; and monitoring of other critical metrics including financial, payments and eCommerce data are all on the roadmap.

“We’re building tools to work in a complementary fashion in the app,” CEO Mark Ruddock said in an interview. “Today, businesses can project if they are likely to run out of money, and monitor their credit scores. We keep an eye on customers and what they are saying in real time. We think it’s necessary to surface for SMBs the metrics that they might have needed to get from multiple apps, all in one place.”

Nuula was originally a side-project at BFS, a company that focused on small business lending, where the company started to look at the idea of how to better leverage data to build out a wider set of services addressing the same segment of the market. BFS grew to be a substantial business in its own right (and it had raised its own money to that end, to the tune of $184 million from Edison and Honeywell).  Over time, it became apparent to management that the data aspect, and this concept of a super app, would be key to how to grow the business, and so it pivoted and rebranded earlier this year, launching the beta of the app after that.

Nuula’s ambitions fall within a bigger trend in the market. Small and medium enterprises have shaped up to be a huge business opportunity in the world of fintech in the last several years. Long ignored in favor of building solutions either for the giant consumer market, or the lucrative large enterprise sector, SMBs have proven that they want and are willing to invest in better and newer technology to run their businesses, and that’s leading to a rush of startups and bigger tech companies bringing services to the market to cater to that.

Super apps are also a big area of interest in the world of fintech, although up to now a lot of what we’ve heard about in that area has been aimed at consumers — just the kind of innovation rut that Nuula is trying to get moving.

“Despite the growth in services addressing the SMB sector, overall it still lacks innovation compared to consumer or enterprise services,” Ruddock said. “We thought there was some opportunity to bring new thinking to the space. We see this as the app that SMBs will want to use everyday, because we’ll provide useful tools, insights and capital to power their businesses.”

Nuula’s priority to build the data services that connect all of this together is very much in keeping with how a lot of neobanks are also developing services and investing in what they see as their unique selling point. The theory goes like this: banking services are, at the end of the day, the same everywhere you go, and therefore commoditized, and so the more unique value-added for companies will come from innovating with more interesting algorithms and other data-based insights and analytics to give more power to their users to make the best use of what they have at their disposal.

It will not be alone in addressing that market. Others building fintech for SMBs include Selina, ANNA, Amex’s Kabbage (an early mover in using big data to help loan money to SMBs and build other financial services for them), Novo, Atom Bank, Xepelin, and Liberis, biggies like Stripe, Square and PayPal, and many others.

The credit product that Nuula has built so far is a taster of how it hopes to be a useful tool for SMBs, not just another place to get money or manage it. It’s not a direct loaning service, but rather something that is closely linked to monitoring a customers’ incomings and outgoings and only prompts a credit line (which directly links into the users’ account, wherever it is) when it appears that it might be needed.

“Innovations in financial technology have largely democratized who can become the next big player in small business finance,” added Gary Golding, General Partner, Edison Partners. “By combining critical financial performance tools and insights into a single interface, Nuula represents a new class of financial services technology for small business, and we are excited by the potential of the firm.”

“We are excited to be working with Nuula as they build a unique financial services resource for small businesses and entrepreneurs,” said Jeffrey Kramer, Partner and Head of ABS in the Alternative Credit strategy of the Ares Credit Group, in a statement. “The evolution of financial technology continues to open opportunities for innovation and the emergence of new industry participants. We look forward to seeing Nuula’s experienced team of technologists, data scientists and financial service veterans bring a new generation of small business financial services solutions to market.”


By Ingrid Lunden

Payments company Paystone raises $23.8M to help service-based businesses engage with customers

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Paystone, a payments and integrated software company, secured another strategic investment this year, this time $23.8 million ($30 million CAD) from Crédit Mutuel Equity, the private equity arm of Crédit Mutuel Alliance Fédérale.

The Canada-based company got its start in 2008 as the payment processing company Zomaron, and rebranded itself as Paystone in 2019. Today it provides electronic payments and customer engagement technology to businesses, particularly those that provide services, CEO Tarique Al-Ansari told TechCrunch.

“Paystone is on a mission to help businesses grow, and we were enthralled by their commitment to that mission and their focus on service-oriented verticals,” said Léa Perge, investor at Crédit Mutuel Equity in Canada, via email.

While most of the company’s peers focus on product companies, Al-Ansari saw how underserved the service side was: their needs are different, and unlike retail, aren’t looking to sell online. Rather, they need an online presence and digital marketing to engage with customers, but their focus is being findable and having content that tells people why they should do business with them.

Paystone provides the marketing through content, help with reviews and with loyalty and rewards programs. However, rather than reward for spending, Paystone rewards for behavior. Refer a friend, get a reward. Write a review, get a reward. Al-Ansari calls it “payments as a benefit.” Referrals and reviews are how businesses become more findable, and the more content that’s out there, the more it helps people consider the business trustworthy, he added.

The new funding gives Canada-based Paystone total funds raised in 2021 of $78.8 million in a mix of debt and equity. It raised $54.9 million in January, funds that were barely touched as of yet, Al-Ansari said.

Though he wasn’t actively seeking new funds, Al-Ansari had been speaking with Crédit Mutuel Equity, which used to be CIC Capital Canada, prior to the pandemic, and their deal was put on hold.

Crédit Mutuel Equity came back with similar interest, and taking into account the kind of talent Paystone wanted to go after and its acquisition strategy — the company has already acquired five companies — Al-Ansari decided to take the additional funds. He said it gives the company options to hire more and double down on building the company, as well as enough capital to look for more acquisitions.

This year, Paystone entered the U.S. market for the first time and will do a proper launch later this year. The company has over 30,000 merchant locations on its platform throughout North America, and Al-Ansari expects that to grow by 5,000 this year. The company has 150 employees currently, and another 50 are expected to come on board by the end of the year.

In addition, Al-Ansari expects growth to accelerate for the rest of the year. The company processes around $6 billion in credit card payments and is on track to bring in $55.7 million in revenue this year. It is cash flow positive, residuals from the company’s origins of being bootstrapped, he said.

“We want to become the go-to destination for service businesses to set up a digital presence to accept payments and provide loyalty and rewards,” Al-Ansari said. “We will do this by solidifying our market position and growing our platform with the tools that customers want.”

Customer feedback is a development opportunity

 


By Christine Hall

Vista Equity takes minority stake in Canada’s Vena with $242M investment

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Vena, a Canadian company focused on the Corporate Performance Management (CPM) software space, has raised $242 million in Series C funding from Vista Equity Partners.

As part of the financing, Vista Equity is taking a minority stake in the company. The round follows $25 million in financing from CIBC Innovation Banking last September, and brings Vena’s total raised since its 2011 inception to over $363 million.

Vena declined to provide any financial metrics or the valuation at which the new capital was raised, saying only that its “consistent growth and…strong customer retention and satisfaction metrics created real demand” as it considered raising its C round.

The company was originally founded as a B2B provider of planning, budgeting and forecasting software. Over time, it’s evolved into what it describes as a “fully cloud-native, corporate performance management platform” that aims to empower finance, operations and business leaders to “Plan to Grow” their businesses. Its customers hail from a variety of industries, including banking, SaaS, manufacturing, healthcare, insurance and higher education. Among its over 900 customers are the Kansas City Chiefs, Coca-Cola Consolidated, World Vision International and ELF Cosmetics.

Vena CEO Hunter Madeley told TechCrunch the latest raise is “mostly an acceleration story for Vena, rather than charting new paths.”

The company plans to use its new funds to build out and enable its go-to-market efforts as well as invest in its product development roadmap. It’s not really looking to enter new markets, considering it’s seeing what it describes as “tremendous demand” in the markets it currently serves directly and through its partner network.

“While we support customers across the globe, we’ll stay focused on growing our North American, U.K. and European business in the near term,” Madeley said.

Extra Crunch members get unlimited access to 12M stock images for $99 per year

Vena says it leverages the “flexibility and familiarity” of an Excel interface within its “secure” Complete Planning platform. That platform, it adds, brings people, processes and systems into a single source solution to help organizations automate and streamline finance-led processes, accelerate complex business processes and “connect the dots between departments and plan with the power of unified data.”            

Early backers JMI Equity and Centana Growth Partners will remain active, partnering with Vista “to help support Vena’s continued momentum,” the company said. As part of the raise, Vista Equity Managing Director Kim Eaton and Marc Teillon, senior managing director and co-head of Vista’s Foundation Fund, will join the company’s board.

“The pandemic has emphasized the need for agile financial planning processes as companies respond to quickly-changing market conditions, and Vena is uniquely positioned to help businesses address the challenges required to scale their processes through this pandemic and beyond,” said Eaton in a written statement. 

Vena currently has more than 450 employees across the U.S., Canada and the U.K., up from 393 last year at this time.

Citrix is acquiring Wrike from Vista for $2.25B


By Mary Ann Azevedo

Microsoft launches new Cortana features for business users

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Cortana may have failed as a virtual assistant for consumers, but Microsoft is still betting on it (or at least its brand) for business use cases, now that it has rebranded it as a ‘personal productivity assistant’ as part of Microsoft 365. Today, at its Ignite conference, Microsoft launched and announced a number of new Cortana services for business users.

These include the general availability of Cortana for the new Microsoft Teams displays the company is launching in partnership with a number of hardware vendors. You can think of these as dedicated smart displays for Teams that are somewhat akin to Google Assistant-enabled smart displays, for example — but with the sole focus on meetings. These days, it’s hard to enable a device like this without support for a voice assistant, so there you go. It’ll be available in September in English in the U.S. and will then roll out to Australia, Canada, the UK and India in the coming months.

Microsoft winds down its bigger plans for Cortana with mobile app shutdown

In addition to these Teams devices, which Microsoft is not necessarily positioning for meeting rooms but as sidekicks to a regular laptop or desktop, Cortana will also soon come to Teams Rooms devices. Once we go back to offices and meeting rooms, after all, few people will want to touch a shared piece of hardware, so a touchless experience is a must.

For a while now, Microsoft has also been teasing more email-centric Cortana services. Play My Emails, a service that reads you your email out aloud and that’s already available in the U.S. on iOS and Android is coming to n Australia, Canada, the UK and India in the coming months. But more importantly, later this month, Outlook for iOS users will be able to interact with their inbox by voice, initiate calls to email senders and play emails from specific senders.

Cortana can now also send you daily briefing emails if you are a Microsoft 365 Enterprise users. This feature is now generally available and will get better meeting preparation, an integration with Microsoft To Do and other new features in the coming months.

And if you’re using Cortana on Windows 10, this chat-based app now let you compose emails, for example (at least if you speak English and are in the U.S.). And if you so desire, you can now use a wake word to launch it.

Cortana wants to be your personal executive assistant and read your emails to you, too


By Frederic Lardinois

Why we’re doubling down on cloud investments right now

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Mary D'Onofrio
Contributor

Mary D’Onofrio is a software investor at Bessemer Venture Partners who joined to start the firm’s growth practice; she’s also an architect of ^EMCLOUD and authored the 10 Laws of Cloud and the State of the Cloud 2020.

Hansae Catlett
Contributor

Hansae Catlett is an investor for Bessemer Venture Partners where he primarily focuses on investments in cloud (enterprise and SMB), machine learning and consumer technologies; he’s an author behind the State of the Cloud 2020.

Elliott Robinson
Contributor

Elliott Robinson is a partner for Bessemer Venture Partners, one of the authors behind the State of the Cloud 2020, and focuses primarily on growth investments in SaaS and cloud companies.

Years from now, people will look back on the COVID-19 pandemic as a watershed moment for society and the global economy.

Wearing a mask might be as common as owning a phone; telework, telemedicine and online education will be more of a norm than a backup plan; and for the global economy, the cloud will have transformed the underlying infrastructure of businesses and entire industries.

COVID-19 is a turning point for the cloud and cloud company founders. For its computing power and as a delivery model of software, the cloud has been embraced as a solution to many challenges that businesses face during today’s economic downturn and recovery. Not only is the cloud industry more resilient than other industries, but the cloud model offers businesses a promising future in the age of social distancing and beyond.

We believe that once founders find shelter in the cloud, they’ll never go back.

Cloud’s resiliency amid historic volatility

Over the past decade, there’s been a massive market shift from on-premises to cloud, as 94% of enterprises use at least one cloud service today. 2020 was already a milestone year for the cloud industry, as aggregate SaaS and IaaS run-rate revenue each crossed $100 billion, and the BVP Nasdaq Emerging Cloud Index (^EMCLOUD) market cap crossed $1 trillion in early February. Yet in a matter of days, as the COVID-19 pandemic spread, fear tore through financial markets.

In early March, public markets experienced the steepest crash in history with volatility we haven’t seen since the Great Recession. The cloud index market cap dropped to ~$750 million and cloud multiples returned close to their historical averages of ~7x while the VIX volatility index spiked to the mid-80s. Both at global highs in February 2020, the ^EMCLOUD and the S&P 500 traded off by roughly 35% by mid-March. Over the next two months, though, the ^EMCLOUD recouped those losses, charging to a new all-time high on May 7.

The cloud index has continued its rise since then, and as of the close on May 11 has a market cap above $1.2 trillion and has returned to the lofty 12x forward run rate revenue multiples from 2019. Similar to Adobe in 2012, we expect many enterprises to transition over to the cloud model, and the index will continue to expand. As we predicted in this year’s State of the Cloud 2020, by 2025 we expect the cloud to penetrate 50% of enterprise software.


By Walter Thompson

Google Cloud announces four new regions as it expands its global footprint

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Google Cloud today announced its plans to open four new data center regions. These regions will be in Delhi (India), Doha (Qatar), Melbourne (Australia) and Toronto (Canada) and bring Google Cloud’s total footprint to 26 regions. The company previously announced that it would open regions in Jakarta, Las Vegas, Salt Lake City, Seoul and Warsaw over the course of the next year. The announcement also comes only a few days after Google opened its Salt Lake City data center.

GCP already had a data center presence India, Australia and Canada before this announcement, but with these newly announced regions, it now offers two geographically separate regions for in-country disaster recovery, for example.

Google notes that the region in Doha marks the company’s first strategic collaboration agreement to launch a region in the Middle East with the Qatar Free Zones Authority. One of the launch customers there, is Bespin Global, a major manages services provider in Asia.

“We work with some of the largest Korean enterprises, helping to drive their digital transformation initiatives. One of the key requirements that we have is that we need to deliver the same quality of service to all of our customers around the globe,” said John Lee, CEO, Bespin Global. “Google Cloud’s continuous investments in expanding their own infrastructure to areas like the Middle East make it possible for us to meet our customers where they are.”

Google Cloud makes strides but still has a long way to go


By Frederic Lardinois

Learn how enterprise startups win big deals at TechCrunch’s Enterprise show on Sept. 5

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Big companies today may want to look and feel like startups, but when it comes to the way they approach buying new enterprise solutions, especially from new entrants, they still often act like traditional enterprise behemoths. But from the standpoint of a true startup, closing deals with just a few big customers is critical to success. At our much-anticipated inaugural TechCrunch Sessions: Enterprise event in San Francisco on September 5, Okta’s Monty Gray, SAP’s DJ Paoni, VMware’s Sanjay Poonen and Sapphire Venture’s Shruti Tournatory will discuss ways for startups to adapt their strategies to gain more enterprise customers (p.s. early-bird tickets end in 48 hours — book yours here).

This session is sponsored by SAP, the lead sponsor for the event.

Monty Gray is Okta’s senior vice president and head of Corporate Development. In this role, he is responsible for driving the company’s growth initiatives, including mergers and acquisitions. That role gives him a unique vantage point of the enterprise startup ecosystem, all from the perspective of an organization that went through the process of learning how to sell to enterprises itself. Prior to joining Okta, Gray served as the senior vice president of Corporate Development at SAP.

Sanjay Poonen joined VMware in August 2013, and is responsible for worldwide sales, services, alliances, marketing and communications. Prior to SAP, Poonen held executive roles at Symantec, VERITAS and Informatica, and he began his career as a software engineer at Microsoft, followed by Apple.

SAP’s DJ Paoni has been working in the enterprise technology industry for over two decades. As president of SAP North America, Paoni is responsible for the strategy, day-to-day operations and overall customer success in the United States and Canada.

These three industry executives will be joined onstage by Sapphire Venture’s Shruti Tournatory, who will provide the venture capitalist’s perspective. She joined Sapphire Ventures in 2014 and leads the firm’s CXO platform, a network of Fortune CIOs, CTOs and digital executives. She got her start in the industry as an analyst for IDC, before joining SAP and leading product for its business travel solution.

Grab your early-bird tickets today before we sell out. Early-bird sales end after this Friday, so book yours now and save $100 on tickets before prices increase. If you’re an early-stage enterprise startup you can grab a startup demo table for just $2K here. Each table comes with four tickets and a great location for you to showcase your company to investors and new customers.


By Frederic Lardinois

The Slack origin story

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Let’s rewind a decade.

It’s 2009. Vancouver, Canada.

Stewart Butterfield, known already for his part in building Flickr, a photo-sharing service acquired by Yahoo in 2005, decided to try his hand — again — at building a game. Flickr had been a failed attempt at a game called Game Neverending followed by a big pivot. This time, Butterfield would make it work.

To make his dreams a reality, he joined forces with Flickr’s original chief software architect Cal Henderson, as well as former Flickr employees Eric Costello and Serguei Mourachov, who like himself, had served some time at Yahoo after the acquisition. Together, they would build Tiny Speck, the company behind an artful, non-combat massively multiplayer online game.

Years later, Butterfield would pull off a pivot more massive than his last. Slack, born from the ashes of his fantastical game, would lead a shift toward online productivity tools that fundamentally change the way people work.

Glitch is born

In mid-2009, former TechCrunch reporter-turned-venture-capitalist M.G. Siegler wrote one of the first stories on Butterfield’s mysterious startup plans.

“So what is Tiny Speck all about?” Siegler wrote. “That is still not entirely clear. The word on the street has been that it’s some kind of new social gaming endeavor, but all they’ll say on the site is ‘we are working on something huge and fun and we need help.’”

Siegler would go on to invest in Slack as a general partner at GV, the venture capital arm of Alphabet .

“Clearly this is a creative project,” Siegler added. “It almost sounds like they’re making an animated movie. As awesome as that would be, with people like Henderson on board, you can bet there’s impressive engineering going on to turn this all into a game of some sort (if that is in fact what this is all about).”

After months of speculation, Tiny Speck unveiled its project: Glitch, an online game set inside the brains of 11 giants. It would be free with in-game purchases available and eventually, a paid subscription for power users.


By Kate Clark

Hootsuite nabs $50M in growth capital for its social media management platform, passes 16M customers

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Over the last several years, social media has become a critical and central way for businesses to communicate, and market to, their customers. Now, one of the startups that helped spearhead this trend has raised a round of growth funding to expand its horizons. Hootsuite, the Vacouver-based social media management company that counts some 16 million businesses as customers, said today that it has raised $50 million in growth capital — specifically through a credit financing agreement — from CIBC Innovation Banking.

We asked Ryan Holmes, the co-founder and CEO, for details about its valuation and funding, and said that it will be used for more acquisitions in the near future, and with it the valuation is unchanged.

“We opted for to go with non-dilutive credit at this point and found a great partner and terms in CIBC,” he wrote in an email. “The company is cash flow positive and the facility will primarily be reserved for M&A purposes. There is no associated valuation, however our latest 409a is up from last year and growth is very strong.”

Notably, the last time Hootsuite raised money — way back in 2014 — the company was already valued at $1 billion. For some context, at the time it had 10 million businesses as customers, and today it has 16 million including what it says is 80 percent of the Fortune 1000, so it’s likely that its valuation has grown as well.

“This financing is a testament to the strong fundamentals behind Hootsuite and our ongoing commitment to innovation and growth as the clear leader in social media management,” said Greg Twinney, CFO of Hootsuite, in a statement. “The additional capital will help us scale even faster to bring the most innovative products and partnerships to market globally and help our customers strategically build their brands, businesses and customer relationships with social.”

The funding, according to the release, will also be used to expand its business in Asia Pacific, Europe and Latin America. It also plans to add in more tools to serve the needs of specific verticals like financial services, government and healthcare.

You may not know the name Hootsuite but you might recognise its mascot — an owl — and more specifically its corresponding shortened link — it starts with ‘ow.ly’ — that is used a lot on Twitter, the social network that gave Hootsuite its first customers and ubiquity.

Things have moved along quite a bit since those early days, when Hootsuite first started as a side project for Holmes, who himself was running a marketing and advertising agency when he started it.

Social media is now the fastest-growing category for marketing spend — partly because of the popularity of social networking services like Facebook, Snapchat and Twitter; and partly because “eyeballs” can be better tracked and quantified on these networks over more legacy channels like print and outdoor ads. At the same time, presenting yourself as a business on a social network is getting harder and harder. Sites like Facebook are focused on trying to improve engagement, and that is leading it to rethink how it shares and emphasizes posts that are not organically created by normal people. On the other side, we’re seeing a new wave of privacy and data protection regulation come in that will change how data can be used across and within these sites.

All of this means that Hootsuite, and others that it competes with, need to get a lot smarter about what it offers to its customers, and how it offers it.

Starting as a modest tool that plugged into Twitter, Hootsuite itself now integrates with just about all of the major social platforms, most recently finally adding Instagram earlier this month. Its customers use a dashboard to both monitor a variety of social media platforms to track how their companies are being discussed, and also to send out messages to the world. And they now use that dashboard and Hootsuite for a growing array of other purposes, from placing ads to content marketing to analytics across an increasing number of platforms — a range of services that Hootsuite has developed both in-house and by way of acquisition.

One challenge that Hootsuite has had over the years has been the company’s focus on the freemium model, and how to convert its initially non-paying users into paying tiers with more premium offerings. Some of that expansion into new services appears to have helped tip the balance.

“In the past year, Hootsuite has seen tremendous growth from acquisitions like AdEspresso, to strategic partnerships with market leaders such as Adobe, to recognitions such as being named a leader in the Forrester Wave and G2 Crowd,” said Holmes in a statement. “This financing allows Hootsuite in continuing to create strong value for customers looking to unlock the power of social.”

Another challenge has been the fundamental fact that Hootsuite relies on third parties to essentially “complete” its offering: Hootsuite offers analytics and tools for marketing, but still needs to connect into social networks and their data pools in order to do that.

This makes the company somewhat dependent on the whims of those third parties. So, for example, if Twitter decides to either increase the fees it charges to Hootsuite, or tries to offer its own analytics and thereby cuts off some of Hootsuite’s access, this impacts the company.

One solution to this is to continue to integrate as many other platforms as possible, to create a position where its stronger because of the sum of its parts. Unsurprisingly, Hootsuite also says that some of the funding will be used to increase its partnerships and integrations.

More generally, we are seeing a trend of consolidation in the area of social media management, as several smaller, and more focused solutions are brought together under one umbrella to improve economies of scale, and also to build out that “hub” strategy, becoming more indispensable, by virtue of providing so much utility in one place.

As part of that trend, we’ve seen two of Hootsuite’s rivals, Sprinklr and Falcon.io (not an owl but another bird of prey), also grow by way of a spate of acquisitions.