Mnubo: Behind The Deal With White Star Capital and McRock Capital

(Photo: Mnubo’s Founders).

On Jan. 30, Montreal-based Mnubo announced that it had raised $16.5 million in Series B financing. The round was led by HSB Group, part of Munich Re and included participation by its existing investors: White Star Capital and McRock Capital, as well as other value-added investors.

Mnubo was founded in 2012 and has built a world-class team of IoT data experts and a full-suite IoT insights platform that is helping companies rapidly transform their connected equipment data into actionable business outcomes. Currently, Mnubo has a global customer base across consumer, commercial and industrial IoT verticals, including top-tier brands, such as Johnson-Controls Hitachi and other leading product manufacturers.

For the latest in the CVCA’s ​“Behind The Deal” series, we caught up with White Star Capital and McRock Capital; two of the players involved in the deal.

Why did your firm choose to invest in Mnubo and the management team?

White Star Capital: An investment in Mnubo, for us, is the right way to benefit from explosive growth in IoT devices across several verticals without betting on a single hardware solution. Mnubo was started by a team of highly skilled and complementary repeat entrepreneurs who have known each other for years. The team had just come out of a successful exit as they were building Mnubo and we were excited to be there to back them.

McRock Capital: Mnubo is one of the first companies in the world to build an analytics architecture for the IoT. The four co-founders have worked together for years prior to starting Mnubo. They have a proven track record of success having sold Blue Slice Networks to Tekelec and then later to Oracle.

What will the invested dollars be used for?

White Star Capital: The proceeds from the round will be used to accelerate Mnubo’s commercial market landgrab and further materialize their sales pipeline.

McRock Capital: The proceeds will be used to expand the team’s sales, marketing and development teams.

Where did you hear about Mnubo?

White Star Capital: White Star first came across Mnubo in 2015 and led their Series A round at the time. Since then we have been quite involved on the board and with the company in several capacities.

McRock Capital: McRock got to know the team shortly after it was founded in 2012. We stayed in touch with the company for several years before they sought their first round of institutional funding in 2015. McRock’s first investment occurred in 2015.

What is your anticipation about this sector in the short term and long term?

White Star Capital: We are seeing a massive boom in the number of connected devices which does not show any signs of slowing down, with the price of components coming down rapidly, every consumer and enterprise device will soon be internet enabled. Mnubo alone taps into over 300 billion data points today and is expected to reach over 5 trillion in the next twelve months. However, all of this data remains just noise without the right insights engine and this is where Mnubo’s big opportunity lies.

McRock Capital: Analytics and applied machine learning for IoT is one of the strongest growth areas in tech representing a market size in excess of US$20B and a CAGR of over 35%.

Is there anything particularly interesting about this deal that you’d like to emphasize?

White Star Capital: Mnubo, as a locally based Montreal Startup, has been quite successful at rapidly selling their solutions across the globe and sector verticals, which is quite unique for an early stage company. For example, Mnubo already has several clients in Asia, notably Japan, as well as across Western Europe. Mnubo’s clients also range from agriculture tech to smart homes and building appliances.

McRock Capital: Mnubo is one of the few companies that has successfully scaled its business through subscription services. Its analytics service is also easily transferrable to multiple market verticals such as light industrial, commercial, agriculture and consumer.

What is your exit horizon on this deal?

White Star Capital/​McRock Capital: Our typical exit horizon for deals at this stage tends to be around 5 years, though sometimes our companies receive unsolicited acquisition offers more quickly.

Whitney Rockley (Co-Founder, McRock Capital), Frederic Bastien (Co-Founder & CEO, mnubo), Jean-Francois Marcoux (Managing Partner, White Star Capital)

Tell us about the lead at your firm involved in this deal.

White Star Capital:Jean-Francois Marcoux — our Montreal based Managing Partner, has been involved with Mnubo at the board level since our initial investment in 2015. His experience from working at multinationals and his global network were helpful in providing guidance on internationally scaling companies. Also, as the co-founder of Ludia, a gaming company that quickly grew from 3 to several hundred employees, he was able to help the Mnubo team with managing accelerated growth.

McRock Capital: Whitney Rockley, Co-founder and Managing Partner, is the lead on the deal and sits on the board of Mnubo.

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