What a week for Canadian start-ups! It was like the tapped was turned on, and the financing started to gush out.
HootSuite raises $3-million from Hearst, WattPad gets $3.5 million from Union Square Ventures, Boris Wertz and Golden Venture Partners, gShift pulls in $1.1 million from GrowthWorks, Paymentus is apparently raising $20-million from Accel-KKR, iLoveRewards is rumoured to have raised $25-million from Sequoia, while Wave Accounting and Guardly were given $750,000 and $250,000 respectively from the Ontario government. (More: Another deal I forgot to mention was Montreal-based Rewardli raising money from a group that included Real Ventures and 500Startups.)
Break out the champagne and Red Bull, do the happy dance, rev up the social media machine, and celebrate the emergence of a vibrant financing landscape for Canadian start-ups.
Before Anyone Gets Too Excited….
Before anyone gets too excited, let’s not get carried away by the fact a bunch of deals were announced in the span of a few days. They do not make for a trend or suggest that Canada’s tepid start-up financing landscape has suddenly changed.
Don’t get me wrong, it’s encouraging and exciting to see start-ups raise money, particularly serious amounts of money to drive big-time growth, but it is important to maintain our perspective. Canada’s start-up landscape is still moribund so these deals, in some respects, have the potential to distract people from the fact Canada has huge challenges supporting start-ups.
There are many start-ups with great ideas and talented entrepreneurs that can’t raise money, even small amounts of seed capital. There’s still a huge gap between demand from interesting start-ups and the supply of money to support their growth.
More Encouragement to Leave the Sidelines
The upside of the fund-apoolza over the past week is it could provide more encouragement for VC and angels to invest in start-ups. Based on the notion a rising tide buoys all ships, the flurry of deals could convince investors the opportunities and time are right to leave the sidelines.
It’s an optimistic outlook given the recent investment activity (see the CVCA’s disappointment second-quarter report) but if we’re looking for positive evidence of better times ahead, there was plenty of ammunition this week.
For more details on the fund-raising activity, check out StartupNorth. You may also want to take a look at my post from earlier this week on whether governments in Canada should be funding start-ups.
And there’s more good reading…..Mark MacLeod (aka StartupCFO) has a good post on the upside of Canadian start-ups being acquired, a response to my post on the downside of start-ups being acquired.
