Dialogue: Behind The Deal With White Star Capital
On Feb. 13, 2018, Montreal-based Dialogue announced it had secured CAD $12M in Series A funding. The round was led by White Star Capital and included participation from CVCA members National Bank and Portag3 Ventures as well as HV Holtzbrinck Ventures and Walter Financial.
Dialogue provides virtual health and telemedicine services to employers who are looking to attract and retain talent while reducing absenteeism and health-related costs.
For the latest in CVCA’s “Behind The Deal” series, we caught up with White Star Capital to discuss the deal.
Why did White Star choose to invest in Dialogue and the management team?
In an increasingly competitive job market, employers are seeking new ways of improving employee attraction and retention. Furthermore, many employers are investing in new ways to improve the overall health of their employees which increases productivity and lowers employee insurance benefit costs. Dialogue is at the nexus of these powerful trends. Also, we have a great team here led by a CEO who’s an experienced med-tech executive and serial entrepreneur.
What will the invested dollars be used for?
The proceeds will be used to grow the sales team, fill key executive positions, continue to expand the service offering, and expand internationally.
Where did you hear about the Dialogue?
White Star has a strong relationship with Portag3 Ventures and Diagram which incubated the company.
What is your anticipation about this sector in the short term and long term?
We believe there will be wide adoption of telemedicine in the next few years as one of the key channels for patients to interact with medical professionals. Regulatory frameworks are improving to allow for online prescriptions and reimbursement by insurance providers. The telemedicine infrastructure is stronger with high smartphone and internet penetration including a higher percentage of elderly people online, matched with an increased willingness for patients to interact virtually with doctors. It is estimated that 20–25% of the primary care interactions could effectively be handled by virtual consultation with the GP. Currently only 1% of the consultations are done through telemedicine. This is about to change in Canada.
Is there anything particularly interesting about the deal with Dialogue that you’d like to emphasize?
The company wanted to bring on investors that could help them scale internationally hence the combination of White Star Capital and HV Holtzbrinck Ventures.
What is your exit horizon on this deal with Dialogue?
As Dialogue continues to grow in the Canadian market, it would be a good candidate for a TSX IPO. Our typical exit horizon for deals at this stage tends to be around five years, though sometimes our companies receive unsolicited acquisition offers more quickly.
Tell us about White Star’s experience and its involvement in this deal.
White Star has deep experience in disruptive commerce and fintech. Dialogue is disrupting the way primary care services are consumed and its go-to-market strategy is like that of insurance companies offering group benefits. Both are models that we know very well. Also, White Star can leverage its international network to help the company scale into other markets outside of Canada.