Whether you’re an investor, an entrepreneur, advisor, developer, designer, researcher, catalyst or involved in the city’s technology ecosystem in any other way, 2020 has been a year like no other for each and every one of us. And through it all, Montreal in Technology has brought you the stories of all these local stakeholders and those who’ve been able to innovate and create value for Montreal.
The goal for pretty much all startup investors is to somehow exit the business with a huge windfall. There are a number of ways of doing that, for example SPACs are became more popular in 2020, and this was certainly the year of the startup IPO. Quebec companies were no exception, raising massive amounts of cash through going public. Companies like Haivision and Nuvei led the way in this space, while Lightspeed, having done an IPO in 2019, did a second public offering but this time on the NYSE in New York.
Goodfood, which has traded publicly for years, has seen strong growth in its market capitalization under the Covid-19 pandemic and announced a bought deal this summer worth $40 million. The former RBC Capital Markets bankers who founded the operation have seen demand skyrocket due to Coronavirus, and have recently put their financial acumen to work again, moving forward with an Automatic Stock Disposal Plan that would put each of them up an additional $3.5 million if exercised today. Those types of deals are often frowned upon by securities regulators, and have subject to additional scrutiny in recent years.
Another way to cash in is to just sell your company to big tech, and we’ve seen a number of acquisitions in the Montreal innovation scene this year. Expertus was acquired by IBM earlier this month, while Mobeewave was snapped up by Apple over the summer for a staggering $100 million!
But not all acquisitions need a US conglomerate to make news. Sometimes one local company buys another, just like ATW Tech did to Semeon this fall. And sometimes it’s just the end of the line for a company, and as its circumstances change, suddenly selling becomes the preferred option. That was the case this year for long-time Montreal darlings Frank and Oak, which filed for bankruptcy protection in June and was later acquired by Unified Commerce Group. UCG itself was founded in 2020 in New York as a vehicle to acquire purpose driven brands.
Of course there are other reasons for acquisitions in this game, not just to save your business or cash out. A number of Montreal teach companies made acquisitions this year not for any of the reasons listed above, but rather to fuel their incredible growth. Led of course, be the aforementioned Lightspeed, which was armed with a ton of new cash it had raised from its US IPO.
The company made 3 acquisitions last year and kicked off 2020 with a $112 million U.S. acquisition of German software maker, Gastrofix, back in January. In an interview CEO Dax Dasilva told MTL in Technology “we’re just getting started”. He wasn’t kidding, other acquisitions followed, including a massive $440 million U.S. purchase of ShopKeep in November.
But Dasilva does not have a monopoly on snapping up tech companies to scale up his business. Like Lightspeed, Montreal’s Dialogue acquired a German company at the start of the year. A short time later Alayacare bought New York based Arrow Solutions in another pre-pandemic transaction. And then over the course of the summer Haivision acquired Denver’s Teltoo.
And speaking of summer, 2020 was meant to be the biggest year yet for Startupfest, which celebrated its 10th anniversary this year. The celebrations were dampened considerably due to the arrival of the pandemic and a vastly scaled down version of the live event was held in Old Montreal, while thousands followed online.
All the staying home and virtual meetings, along with the stress and anxiety of the pandemic, amplified mental health challenges for many people in all walks of life. Montreal entrepreneurs saw an opportunity to help. Francis Beaulieu has been working on an initiative specifically for founders. Others like AIFred took a broader approach to mental health and wellness, and were rewarded handsomely.
We saw new innovation zones develop and a new format for tech commercialization offices be proposed for Quebec. No fewer than 16 Montreal tech companies made the Globe and Mail’s list of fastest growing businesses in Canada. And this year, perhaps more than ever, the importance of diversity in the innovation economy was emphasized with a very significant investment from CDPQ. The Government of Canada for it’s part launched additional initiatives to promote diversity, and a range of other players got together to continue to address the incredible VC funding gap women entrepreneurs face.
The pandemic has given governments an opportunity to look at how to “build back better” or implement a “green new deal” to tackle both a challenging economic recovery ahead, as well as the dire climate situation humanity is facing all around the world. This, combined with an incoming US administration that may actually acknowledge these realities has made investing in green tech more attractive than ever, and the best is yest to come in 2021.
Consequently, a number of Quebec companies developing green tech were able to take a big step forward this year, including:
And while it was a big year for green tech in Montreal, there were also a few failures across the ecosystem. 2020 was the year we lost Element AI for about $200 million, less than half of the amount initially reported. And they weren’t the only company whose business model didn’t pan out, as Breather was forced to make major changes to its business and find a new way to carry on as well.
But there were far more big wins this year than setbacks. A pandemic cannot stop science, and we saw a number of locally led funds created in 2020 including a new $60 million fund at Brightspark, a massive $145 million for the aforementioned cleantech at Cycle Capital, and an incredible $250 million diversity fund at CDPQ, just to name a few. There were also a number of other actions from investors to help create a more just ecosystem.
If all of this was not a big enough sign of investor confidence in the future of Montreal’s tech entrepreneurs, research and talent… Here’s a list of some of the largest raises in our ecosystem in 2020:
- AddEnegrie – $53 M
- Busbud – $15 M
- AppDirect – $243 M
- Breathelife – $11.5M
- Dialogue – $43 M
- GHG Sat – $28 M + $39 million
- Sonder – $232 M
- Hopper – $98.5 M
- Vention – $38 M
- North One – $21 M
- Unito – $10.5 M