Founded in 2009, Plusgrade provides ancillary revenue solutions for the global travel industry. The Montreal-based company was born out of a simple observation: premium seats often remained empty on flights even when there were travelers in economy who wished they could upgrade. “That gap represented both an opportunity and a challenge,” says the company’s Founder and CEO, Ken Harris. “The idea for Plusgrade was very straightforward. We wanted to give travelers the ability to bid for an upgrade, which would benefit both them and the airline.”
From the outset, Harris had an ambitious plan to grow the company. As Plusgrade expanded over the years, he and his team found more ways to create new revenue streams for the travel industry while also better serving travelers. When the pandemic hit, however, the company suddenly found itself operating in a very difficult market environment. Undeterred, Harris sought to bring on a new investor who would not only help sustain the business through a very challenging period financially but also provide the capital necessary to accelerate his vision for growing the business.
It was then that Harris reached out to his long-time friends at Novacap, a leading North American private equity investor and one of Canada’s most experienced private equity firms, who he had known for years. “I knew Novacap, its people, and its reputation; that they would work well with our existing investor CDPQ; and that they had the right strengths to support our next phase of growth,” says Harris.
“Our investment in Plusgrade, alongside CDPQ, exemplifies the type of collaboration we seek — one rooted in trust, innovation, and a shared vision for bold growth,” said Pascal Tremblay, President & CEO, Managing Partner at Novacap. “Supporting Plusgrade’s expansion, even during the industry’s most challenging times, underscores our commitment to empowering entrepreneurs to realize their ambitions. At Novacap, we pride ourselves on building resilient partnerships that thrive through all cycles.”
For Novacap, which had been tracking the company for a number of years, investing in Plusgrade wasn’t a question of if, but rather when. “We love businesses like Plusgrade that provide innovative solutions, are leaders in their niche, and have plenty of room to grow into new geographies and verticals,” says Kristin Smith, Partner at Novacap. “We had long wanted to invest in the company and were excited to buy out one of Plusgrade’s existing investors in 2021 — during the middle of the pandemic — and to double down on the growth of the business.”
A Short Partnership Yields a Meaningful Exit
“We executed on value creation quickly with Plusgrade,” says Smith. “It’s a testament to Ken, who’s an incredible founder and CEO, and to his management team.” By 2023, just two years into their partnership, Novacap had deployed significant capital into M&A, helping to accelerate Plusgrade’s growth. Recognizing the abundance of compelling acquisition opportunities ahead, Novacap, together with CDPQ and Ken, proactively decided that bringing in a new investor would best position Plusgrade for its next chapter of expansion — ensuring that the company would have the full financial flexibility to pursue its ambitious growth plans without limitation.
Unsurprisingly, Plusgrade attracted a lot of interest and ultimately, General Atlantic, a leading global growth investor, bought a stake in Plusgrade in March 2024. For Novacap, it was a great outcome for its partners while also earning the firm the PE Regional Impact Award for Central Canada, sponsored by KALOS LLP.
Not only was Novacap pleased with the outcome, so was CDPQ, Harris, and his team. Reflecting back on his relationship with the firm, he notes “Partnerships get tested in tough times. The travel industry faced its single greatest challenge when the world shut down during the pandemic. Many companies didn’t make it through. Not only did we make it, we emerged stronger than ever because we had the right partners in the fight with us — partners who truly believed in our vision and had the conviction to push forward when the easy choice was to pull back. In our book, that’s a partnership worthy of recognition.”
