The rise of Shopify, based in Ottawa, Ontario, has boosted Canada\u2019s tech scene in recent years. But what\u2019s it actually like raising money for an early-stage startup in Canada these days?<\/p>\n
Zack Elias and Ross Correia, two Shopify alums, are a case study of the possibilities and challenges that lie before Canadian startups. The two cofounded their startup, Reactiv, last year and were candid about the process of raising money. It was hard, they said\u2014day after day, pitch after pitch. Elias and Correia often felt, especially in Canada, that investors didn\u2019t understand how ambitious they were. But they pushed forward.\u00a0<\/p>\n
\u201cWe\u2019ve been in the ecosystem for ten years, and we had this pure conviction that this was what the market needed,\u201d said Correia. \u201cWe believed we were the right team to do it. But, yeah, we bet the farm on it!\u201d<\/p>\n
Reactiv is an AI-powered platform that helps brands quickly launch and manage mobile apps. And now Elias and Correia\u2019s fundraising perseverance has paid off, as Reactiv has raised $5 million in seed funding. The round was led by Bonfire Ventures, with participation from Foxe Capital and Anthemis, Daher Capital, and Alumni Ventures. Though none of those firms are Canada-based, the company does have some Canadian angel investors.\u00a0<\/p>\n
The startup may be Canada-based, but the company is looking to meet retail market trends that are happening everywhere. (And there\u2019s AI in the mix, too.)\u00a0<\/p>\n
Reactiv operates right in the place where a wide swath of consumers are increasingly doing most of their shopping\u2014our phones. According to Pew, around three-quarters of Americans report shopping online with their smartphones, a trend that\u2019s even higher among young demographics and at the average surpassing desktops, laptops, and tablets.\u00a0\u00a0<\/p>\n
The startup\u2019s AI-powered platform handles everything from setup to ongoing updates. By personalizing customer engagement and streamlining maintenance, Reactiv aims to make mobile apps the go-to for brand interactions over mobile websites. Bonfire Ventures principal Jennifer Richard is bullish on the company\u2019s newly launched Reactiv Clips, calling its ability to give \u201conline sellers the power to send free push notifications to customers who have interacted with an ad, even if they haven\u2019t downloaded the app\u201d a potential game-changer for customer acquisition costs (CAC).<\/p>\n
Reactiv\u2019s customers so far include Missouri Star Quilt Company, FragranceBuy, Top of the Mornin\u2019 Coffee, and sneaker retailer Plus Shop.<\/p>\n
\u201cI think that the AI platform shift is exciting for VC because it is a reminder that every industry is subject to cyclical improvements based on emerging technologies and evolving customer expectations,\u201d said Foxe Capital general partner Ruth Foxe Blader via email. \u201cWe\u2019re seeing an explosion in commerce opportunities. Some will reach true venture scale. We believe that Reactiv is one of those.\u201d<\/p>\n
For Elias and Correia, the funding is a validation of where they believe e-commerce is heading\u2014and not just to your phones (in 2023, mobile commerce reached $2.2 trillion), but towards increasingly personalized experiences.\u00a0<\/p>\n
\u201cWe\u2019re going back to luxury shopping of the past\u2014where you\u2019d walk in, and they would open a bottle of sparkling water for you and ask you what you like,\u201d said Correia.\u00a0<\/p>\n
Though these are global trends and the two have found investor-believers internationally, Elias and Correia remain devoted to their Canadian roots.\u00a0<\/p>\n
\u201cWe were actually pretty adamant about keeping Reactiv a Canadian business,\u201d Elias texted me. \u201cWhile fundraising, a lot of VCs asked if we\u2019d move to be a Delaware corp. Shopify always said Canadian businesses didn\u2019t need to \u2018go for bronze\u2019 like they typically do. We\u2019re going for gold and keeping it here in Canada.\u201d<\/p>\n
ICYMI\u2026<\/strong>Simbe Robotics raised a $50 million Series C round led by Goldman Sachs\u2019 growth equity fund, as reported by Fortune<\/em>\u2019s Jessica Mathews. And if you were really under a rock, Alphabet-owned Waymo closed a $5.6 billion led by, well, Alphabet, which was joined by Andreessen Horowitz and Fidelity among others. I keep asking myself\u2014how often do you see an in-house company raise outside capital? As always, I\u2019d love to hear your takes.\u00a0<\/p>\n Join us\u2026<\/strong>You\u2019re invited to Fortune Global Forum in NYC from Nov. 11-12. Speakers include seven-time Super Bowl champion Tom Brady (we will not be reenacting Netflix\u2019s roast of the NFL legend) and Pulitzer Prize-winning composer Wynton Marsalis. More information here.<\/p>\n See you tomorrow,<\/p>\n Allie Garfinkle Nina Ajemian curated the deals section of today\u2019s newsletter.<\/em> Subscribe here. <\/p>\n VENTURE DEALS<\/b><\/p>\n – <\/span>Waymo<\/b><\/a>, a Mountain View, Calif.-based self-driving vehicle developer and rideshare provider, raised $5.6 billion in Series C funding. <\/span>Alphabet<\/b> led the round and was joined by existing investors <\/span>Andreessen Horowitz<\/b>, <\/span>Fidelity<\/b>, <\/span>Perry Creek<\/b>, and others.<\/span><\/p>\n – <\/span>AvenCell Therapeutics<\/b><\/a>, a Watertown, Mass.-based cell therapy company, raised $112 million in Series B funding. <\/span>Novo Holdings <\/b>led the round and was joined by <\/span>F-Prime Capital<\/b>, <\/span>Eight Roads Ventures<\/b>, <\/span>Piper Heartland Healthcare Capital<\/b>, <\/span>NYBC Ventures<\/b>, and existing investor<\/span> Blackstone Life Sciences.<\/b><\/p>\n – <\/span>Agomab Therapeutics<\/b><\/a>, an Antwerp, Belgium-based disease modification biotech company, raised $89 million in Series D funding from <\/span>Sanofi<\/b>, <\/span>Invus<\/b>, and existing investors.<\/span><\/p>\n – <\/span>Read AI<\/b><\/a>, a Seattle-based productivity AI company, raised $50 million in Series B funding. <\/span>Smash Capital<\/b> led the round and was joined by existing investors <\/span>Madrona<\/b> and <\/span>Goodwater Capital<\/b>.<\/span><\/p>\n – <\/span>OneStep<\/b><\/a>, a New York City-based smartphone-based motion analysis digital healthcare platform, raised $36 million in funding. <\/span>Team8<\/b> and <\/span>Vintage Investment Partners<\/b> led the round and were joined by existing investors <\/span>LionBird<\/b>, <\/span>Aleph<\/b>, and <\/span>10D<\/b>.<\/span><\/p>\n – <\/span>Reflexivity<\/b><\/a>, a New York City-based AI solutions provider for the investment industry formerly named <\/span>Toggle AI<\/b>, raised $30 million in Series B funding. <\/span>Greycroft<\/b> and <\/span>Interactive Brokers<\/b> led the round and were joined by <\/span>Stanley Druckenmiller<\/b>, <\/span>Greg Coffey<\/b>, <\/span>General Catalyst<\/b>, and <\/span>SoftBank LatAm<\/b>.<\/span><\/p>\n – <\/span>Abstract Security<\/b><\/a>, a Palo Alto-based security data fabric and analytics company, raised $15 million in Series A funding. <\/span>Munich Re Ventures<\/b> led the round and was joined by\u00a0 existing investors <\/span>Crosslink Capital<\/b> and <\/span>Rally Ventures<\/b>.<\/span><\/p>\n – <\/span>DataCrunch<\/b><\/a>, a Helsinki-based AI computing infrastructure provider, raised $13 million in seed funding. <\/span>byFounders<\/b> led the round and was joined by <\/span>J12 Ventures<\/b> and angel investors.<\/span><\/p>\n – <\/span>Dash Bio<\/b><\/a>, a Boston-based drug development tech-enabled services provider, raised $6.5 million in seed funding. <\/span>Freestyle Capital <\/b>led the round and was joined by <\/span>Swift Ventures<\/b>, <\/span>LifeX Ventures<\/b>, and others.<\/span><\/p>\n – <\/span>Pharos<\/b><\/a>, a San Francisco-based hospital quality reporting platform, raised $5 million in seed funding. <\/span>Felicis<\/b> led the round and was joined by <\/span>General Catalyst<\/b>, <\/span>Moxxie<\/b>, and <\/span>Y Combinator<\/b>.<\/span><\/p>\n – <\/span>Hue<\/b><\/a>, a San Francisco-based AI SaaS user-generated video content platform for e-commerce, raised $4.5 million in seed funding. <\/span>Fika Ventures<\/b> and <\/span>Underscore VC<\/b> led the round and was joined by existing investors <\/span>Sequoia Scouts<\/b>, <\/span>The MBA Fund<\/b>, <\/span>Glasswing Ventures<\/b>, and others.<\/span><\/p>\n – <\/span>First<\/b>, a San Francisco-based online prenup platform, raised $4 million in seed funding. <\/span>Expa<\/b> led the round and was joined by <\/span>Springbank<\/b>, <\/span>Sarah Kunst<\/b>, <\/span>Springbank<\/b>, <\/span>Karman Ventures<\/b>, and angel investors.<\/span><\/p>\n – <\/span>Aether<\/b><\/a>, a San Francisco-based rooftop solar AI platform, raised $2.5 million in seed funding. <\/span>noa<\/b> led the round and was joined by <\/span>Y Combinator<\/b>, <\/span>Collab Fund<\/b>, <\/span>Amino Capital<\/b>, and <\/span>Climate Capital<\/b>.<\/span><\/p>\n PRIVATE EQUITY<\/b><\/p>\n – <\/span>Bridgepoint<\/b> agreed to reinvest in <\/span>Kyriba<\/b><\/a>, a San Diego-based liquidity performance company, and will remain the majority shareholder. <\/span>General Atlantic<\/b> agreed to acquire a minority stake in <\/span>Kyriba<\/b>. Financial terms were not disclosed.<\/span><\/p>\n – <\/span>Cumming Group<\/b>, backed by<\/span> New Mountain Capital<\/b>, <\/span>Tailwind Capital<\/b>, acquired <\/span>CLoSE UK<\/b><\/a>, a Buckingham, England-based quantity surveying advisory firm. Financial terms were not disclosed.<\/span><\/p>\n – <\/span>Insignia Capital Group<\/b> acquired and merged <\/span>Oxford Road<\/b><\/a>, a Sherman Oaks, Calif.-based podcast advertising agency, and <\/span>Veritone One<\/b><\/a>, a Costa Mesa, Calif-based podcast advertising agency. Financial terms were not disclosed.<\/span><\/p>\n – <\/span>Oaktree Capital Management<\/b> agreed to acquire a majority stake in <\/span>LED Group<\/b>, which operates through <\/span>ROBUS<\/b><\/a>, a Dublin-based lighting products supplier for electrical contractors, and <\/span>FuseBox<\/b><\/a>, a Kilmarnock, Scotland-based circuit protection brand. Financial terms were not disclosed.<\/span><\/p>\n – <\/span>Polaris Private Equity<\/b> agreed to acquire a majority stake in <\/span>7N<\/b><\/a>, a Copenhagen-based IT consultancy services provider. Financial terms were not disclosed.<\/span><\/p>\n – <\/span>Simpro Group<\/b>, backed by<\/span> K1 Investment Management<\/b> and <\/span>Level Equity<\/b>, acquired <\/span>BigChange<\/b><\/a>, a Leeds, England-based job management software provider for the field services industry. Financial terms were not disclosed.<\/span><\/p>\n EXITS<\/b><\/p>\n – <\/span>Permira<\/b> agreed to acquire a minority stake in <\/span>K-Way<\/b><\/a>, a Paris-based outerwear brand, from <\/span>BasicNet<\/b>. Financial terms were not disclosed.<\/span><\/p>\n
Twitter:<\/strong> @agarfinks<\/a>
Email:<\/strong> alexandra.garfinkle@fortune.com
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