Why the Bit Stew Sale is Great News for Canada’s VC Ecosystem
Yesterday, Burnaby-based startup Bit Stew Systems Inc., a leader in the development of software and analytics for the Industrial Internet of Things, announced that GE Digital (GED) is acquiring the company for $207-million (as reported by the Vancouver Sun)—one of the biggest exits of a VC-backed company in Vancouver’s tech scene in years.
This acquisition represents a huge win for Bit Stew’s investors which includes Yaletown Partners, Cisco, Kensington Capital Partners, BDC Capital and Elevation Partners (the firm started by Bono). It’s also big news for B.C.’s tech sector, as the deal shines a very positive light on the energy and innovation of the local tech industry.
From our perspective, it demonstrates once again the importance of a Canadian VC ecosystem. Several Bit Stew investment rounds were led and funded by Canadian VCs and ultimately attracted global corporate investors GE and Cisco, now having a lasting impact on the Vancouver tech scene.
According to Bit Stew’s CEO, Kevin Collins, attracting venture capital from a mix of local and strategic sources throughout the growth of the company enabled them to scale from startup into an IIoT industry leader. “We are extremely pleased with the backing we received from our investors,” Collins says.
Yaletown Partners, an early Bit Stew investor, placed its first bet on the startup in 2013, co-leading a $10-million Series A financing with Cisco. Yaletown’s take from the sale is $32-million—netting seven times its original investment. These details, sourced from the deal’s plan of arrangement filed with the Supreme Court of British Columbia, were made public by the Globe and Mail.
“We congratulate the Bit Stew team on making a significant contribution to Canadian technology for Intelligent Industry, and from right here in the Vancouver area,” says Salil Munjal, Yaletown’s General Partner and Chair of Bit Stew’s board of directors.
GE showed serious interest in Bit Stew last year, when it led a financing worth more than $20-million with participation from BDC Capital, Cisco and Yaletown Partners. According to CVCA InfoBase, Bit Stew has raised over $53-million in funding since 2013.
“After the Series A financing, they blew the socks off the utility industry,” says Munjal. “They went from a couple of million devices under management to 30 million. It was an unprecedented rate of growth.”
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