BuildDirect raises $50M Series C round in one of 2014’s largest VC deals

Vancouver-based tech company BuildDirect Technologies announced last week that it has raised a $50 million Series C round through BMO Capital Markets, OMERS Ventures, Mohr Davidow Ventures, and other investors.

BuildDirect operates a marketplace for home improvement buyers (consumers and subcontractors) and sellers (manufacturers, designers, trades and shippers). The company will use the investment to rapidly expand and scale its marketplace technology, notably by expanding its product offerings, by making it easier for vendors to sign up, and by hiring 50 new employees.

This is BuildDirect’s fifth round since its founding in 2009, bringing its total funding to $112 million ($80M of which was raised this year). According to the Financial Post, the company’s valuation is approaching $500 million, with annual revenues between $100 million and $150 million.

This $50 million round is one of the largest Canadian VC rounds closed in 2014, surpassed only by Slack’s $120 million round in October, Desire2Learn’s $85 million round in August, and Hootsuite’s $60 million round in September.

“This financing underscores the speed at which old-world industries are breaking down and platform companies that leverage cutting-edge technology and data analytics, like BuildDirect, are putting the power in the hands of both the supply and demand side,” said Katherine Barr, General Partner, Mohr Davidow Ventures. “Home improvement is a half-trillion dollar industry and is severely fragmented and inefficient. BuildDirect is disrupting the existing supply chain in this industry and building a completely new, highly efficient and smart system that suppliers and consumers alike will benefit from tremendously in terms of manufacturing and distribution efficiencies for suppliers, and lower cost for high quality products and a much improved user experience for consumers.”

Canada’s industries are increasingly moving from old-word fragmented approaches to doing business to the adoption of new technology platforms that simplify transactions within a common online marketplace. While BuildDirect is leading the charge in the home improvement market, The Funding Portal is leading the way in Canada’s government funding and capital markets. The portal is Canada’s only Exempt Market Dealer (EMD) portal able to assist companies into both government incentives and capital and financing markets. Learn how your business can now use the portal to efficiently close transactions within capital markets or join the portal’s MyFundCard network to qualify for matches with other network members, including issuers, dealers and investors.

FundingAwards – Who got Funded – Week of Dec. 8

Overall Disbursements: Funding from federal and provincial governments grows to $420.4M this week, compared to $52.9M last week.

Top Sector: Manufacturing is the top sector this week, attracting $301.4M, 72% of the total amount disbursed.

Top Region: Quebec is the top province this week, attracting 73% of the total amount disbursed.

Top Recipients in Ontario:

  • Industry: Brick Brewing Company Ltd. receives $357,959 from the provincial Southwestern Ontario Development Fund to help expand its Kitchener brewery into a fully integrated facility. The expansion will create 10 new jobs and retain another 112.
  • Hospitals, Universities, Research Centres & Industry Associations: No new awards this week.
  • Charities, Non-Profits & Public Sector: The National Arts Centre receives $110.5M from the federal government for its architectural renewal.

Funding Disbursed by Industry Sector:

sectors16

Funding Disbursed by Province:

pros16

Active Funding Programs this Week:

  • Aide aux immobilisations
  • Canada Arts Presentation Fund
  • Canadian Initiative for the Economic Diversification of Communities Reliant on Chrysotile
  • Domestic Violence Prevention Strategy
  • Employment Program
  • Entente Montréal 2025
  • First Nations Clean Energy Business Fund
  • Fonds de diversification économique de la MRC des Sources
  • Fonds de diversification économique du Centre-du-Québec et de la Mauricie
  • Growing Forward 2
  • Growing Value
  • Local Food Fund
  • Main Television Production Assistance Program (MPAP)
  • Quebec Economic Development Program
  • Southwestern Ontario Development Fund
  • Strategic Aerospace & Defence Initiative
  • Western Diversification Program.

To receive daily reports on which organizations received funding in Canada, subscribe to The Funding Portal’s FundingAwards™ service.

Canadian Private Financing and M&A News Roundup – Week of Dec. 8

  • Healthtech
    • Toronto-based neurosurgical technology company Synaptive Medical raised $887.1K in VC.
    • BC’s Versant Ventures closed a US$305M life sciences fund with a $15M contribution from the Fonds de solidarité FTQ.
    • The Banting & Best Diabetes Centre (BBDC), Canada’s leading centre of excellence for innovation in diabetes research, education and clinical care, announced a $1M investment by AstraZeneca Canada in two projects that aim to improve diabetes patient care. $750,000 will establish the AstraZeneca Impact Challenge, providing grants for research into the relationship between heart disease and diabetes at BBDC and the Heart and Stroke/Richard Lewar Centre of Excellence in Cardiovascular Research. A further $250,000 will support the Knowledge Translation and Optimizing Care Models Program, which provides pharmacists with education and tools to more effectively support their diabetes patients.
  • Social ventures
    • MaRS and Virgin Unite Canada, the non-profit foundation of the Virgin Group, joined forces to support Canadian entrepreneurs tackling social and environmental challenges. Sir Richard Branson, Virgin Group Founder, was at the MaRS Centre to announce the new partnership, which includes the development of a new, national impact venture fund. This fund has $1M in seed capital provided by Virgin Unite Canada and the Vancouver-based Mindset Social Innovation Foundation. The impact venture fund, managed by the MaRS Centre for Impact Investing, will invest in early-stage for-profit companies with a core social and/or environmental mission, measurable positive impact and the potential for strong financial returns.
  • Tech and e-commerce
    • Toronto-based growth hacking platform Gallop Labs raised $2M in seed financing from five investors: Jennifer Lum, Albert Lai, Allen Lau, Mantella Venture Partners, and Golden Venture Partners.
    • Vancouver-based online manufacturer and wholeseales BuildDirect raised a $50M Series C round through BMO Capital Markets, OMERS Ventures, and Mohr Davidow Ventures.
    • Kitchener-based payroll software maker Wagepoint raised a $2M seed round through the Atlantic Canada Opportunities Agency, BDC, Extreme Venture Partners, as well as American and Canadian angel investors.
    • Cambridge-based COM DEV International Ltd., a global designer and manufacturer of space hardware and subsystems, signed an agreement to acquire 100% of MESL Microwave Ltd. for £12.8M. Headquartered in Edinburgh, Scotland, MESL Microwave Ltd. plays a significant role in the global microwave technology market, designing and manufacturing high-reliability components and subsystems for the radar, communications, defence and aerospace industries.

FundingSources – Must Reads

This week’s Must Reads from Funding Agencies and Industry Associations

  • BCTIA: The BC Technology Industry Association (BCTIA) and entrepreneurship@UBC (e@UBC), a unique program that delivers an unprecedented combination of education, venture creation, and seed funding to maximize the creation of commercial and social ventures, announced a strategic partnership to deliver comprehensive programming that will support emerging tech companies from concept to commercialization.
  • NCE: Five research networks have been named to conduct groundbreaking research that focusses on addressing various major health and life sciences issues. Ed Holder, Minister of State (Science and Technology), made the announcement at the Canadian Arrhythmia Network (CANet), a new network that will receive $26.3M over five years to support collaborative research aimed at reducing premature deaths and suffering caused by hearth rhythm disturbances.
  • RBC: Canada’s economy is expected to see higher export growth in 2015, despite the recent decline in oil prices, according to the latest Economic and Financial Market Outlook issued by RBC Economics. RBC is forecasting real GDP growth of 2.5 per cent in 2014, 2.7 per cent in 2015 and 2.1 per cent in 2016.
  • Quebec: In 2012, internal R&D spending dropped by 4.4% in real value, from $7.8B in 2011 to $7.46B. The drop was felt in three sectors: commercial businesses (lowest R&D spending levels since 2000), the public sector, and the academic sector.

QP Briefing: Ontario’s GDP growth to top 3 per cent in 2015, RBC forecasts

By John Valorzi

Ontario’s economy will grow more 3 per cent in 2015, as a boom in exports and falling oil prices help it top the provincial outlook, according to Royal Bank’s latest provincial economic forecast.

The bank said Friday it expects Ontario’s real GDP will grow 2.3 per cent this year and 3.1 per cent in 2015. That’s above earlier forecasts by the bank and sharply higher than the 2.4-per-cent growth projected by Finance MinisterCharles Sousa in his fall economic statement less than a month ago.

The bank says a surging export sector, a strong housing market and low oil prices are underpinning the recovery in Ontario.

“Stronger exports, higher household spending and brisk activity in the housing sector have reinvigorated Ontario’s economy since the spring of 2014 after real GDP growth slowed to a post-recession low of 1.3 per cent in 2013,” said Craig Wright,  RBC’s chief economist.  “We believe that the recent turnaround in Ontario’s exports is just the beginning of a powerful export-led push that will contribute to the fastest growth that the province has seen in five years in 2015.”

That’s good news for the ruling Ontario Liberals, who hope that economic growth will help generate higher tax revenues so the government can wipe out its $12.5 billion deficit by 2017-2018.

The forecast also predicts a strong rebound in the manufacturing sector, which has lost more than 300,000 jobs since the 2009 recession, mainly in the auto, steel and other industrial sectors.

But a rebounding American economy and a falling loonie, which makes exports cheaper in the U.S. market, are helping turn around that pivotal sector.

RBC said merchandise exports rose a solid 7.3 per cent on a nominal basis during the first 10 months of 2014 – the strongest pace since 2010 and the second strongest pace in 14 years.

Breaking down specific sectors, the bank said exports of motor vehicles and parts rose almost 8 per cent. However, it was a surge in consumer goods exports that stood out, with an increase of 15 per cent.  There were also encouraging gains in forest products (up nearly 10 per cent) and electronic and electrical equipment (up 2.5 per cent).

“External demand for Ontario’s goods showed renewed vigour and generated much-needed steam for the province’s manufacturing sector,” Wright added.

Looking ahead, he said “the upswing in Ontario’s exports has a lot of runway.”

“We expect the province’s biggest export market – the U.S. economy – to expand at a 10-year high rate in 2015, and the lower value of the Canadian dollar to improve the international competitiveness of businesses in the province,” Wright said.  “Therefore, the elements will be in place for external demand to drive economic growth in the province in 2015 with positive ripple effects throughout the economy.”

In Ontario, job creation will pick up in 2015,  and the bank forecasts employment to grow 1.4 per cent, up from a five-year low of 0.8 per cent in 2014. Improving job prospects and lower gasoline prices are positive for the province’s domestic economy, offering favourable conditions for further growth in household spending, RBC says.

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Pratt & Whitney Canada attracts $300M SADI investment

Aerospace giant Pratt & Whitney Canada (P&WC) will receive a $300 million repayable contribution through Industry Canada’s Strategic Aerospace and Defence Initiative (SADI), the federal government announced Monday.

The company, which employs 6,000 people across Canada, will use the funding to produce the next generation of high-performance airplane engines. The majority of the work will take place in Longueuil, Quebec, and Mississauga, Ontario. The project is expected to support 1,500 jobs over the next five years. More than 65 Canadian product and service providers will also contribute to the project.

P&WC will invest more than $1 billion in R&D under the project over the next 4.5 years. The new engines will improve environmental performance, including reduced fuel consumption and weight, lower emissions, and less noise. The company also plans to invest $275 million to upgrade its technologies and facilities, including the creation of a world-class Centre of Excellence for intelligent manufacturing in Longueuil. The new Centre is expected to be fully operational in 2015.

“The Government of Canada’s investment enables P&WC to invest over $1 billion overall to pursue its long-standing legacy of innovation and sustain its engineering and manufacturing Centres of Excellence in Alberta, Ontario, Quebec and Nova Scotia,” said P&WC President John Saabas. “The Government of Canada’s continued commitment to the aerospace industry will help support high-quality job opportunities for the next generation of skilled workers in Canada and allow P&WC to continue to be an innovative leader in the industry.”

SADI is the largest direct funding program providing support to Canada’s Aerospace and Defence Sector. The Fund was launched in 2007 and provides repayable contributions to companies of all sizes to support their research and development (R&D) projects. To date, SADI has authorized more than $1.45 billion in funding assistance to 35 different projects. Although the fund does not have a minimum or maximum funding threshold, past contributions have ranged between $276,000 and $300 million per project.

Budget 2013 announced $1 billion in new funding to support of the program, in addition to the creation of the Technology Demonstration Program (TDP).

The TDP, administered by Industry Canada, covers up to 50% of eligible project costs for large-scale technology demonstration projects in the aerospace, defence, space and security sectors. Projects must be led by an Original Equipment Manufacturer (OEM) or a Tier 1 company (one that directly supplies an OEM), and require the integration of many technologies. Each project must also have the participation of at least one SME and one accredited Canadian university, college or affiliated research institute. The Fund is expected to provide up to $54 million in funding per year to a maximum of three approved projects.

In 2013, the Canadian aerospace industry supported 170,000 jobs and contributed $28 billion to the national economy. Businesses in the sector can access more than 620 government funding programs, representing more than $5.6 billion in annual available funding, using The Funding Portal.