ScaleUP Ventures Wins 2023 CVCA VC Regional Impact Award (Western Canada) for Canalyst
Vancouver-based Canalyst is a next-generation, independent equity research platform that provides investors and other financial professionals with access to up-to-date, forward-looking financial models for publicly traded equities on major exchanges across the globe. Founded in 2015, the Canalyst platform effectively democratizes the kind of advanced equity analysis that was previously only available to the largest and most sophisticated financial asset managers.
“Hundreds of institutions around the world use Canalyst,” says Damir Hot, the company’s Co-Founder and CEO. “Our platform saves investors time while giving them access to the data they need to make better decisions.”
As Canalyst grew, Hot and Co-Founder James Rife were approached by plenty of potential investors. One that really stood out, however, was Christian Grunt, a Partner at Toronto-based ScaleUP Ventures, Canada’s premier early-stage venture fund. “At a time when I was getting a ton of what was clearly automated inbound interest, Christian’s outreach was not only genuine, but also demonstrated that he really understood the space we’re working in,” recalls Hot. “As we went to raise our Series B in 2019, there was no doubt in my mind that we should talk to ScaleUP.”
As Hot got to know the ScaleUP team he became increasingly impressed. “We knew a lot of the same people, all of whom had great things to say,” says Hot. “Plus it was obvious to us that they were very business minded and that they’d do what they said they would.”
For its part, the ScaleUp team had been excited about Canalyst for some time. “As a team, we look to leverage the ScaleUP Leadership Council, which includes several large institutions, with sizable public equities groups,” says Grunt. “We had long been interested in the kind of alternative data that Canalyst delivers and appreciated that they had positioned themselves to take advantage of the changing dynamic between the sell side and the buy side. Plus, once we started talking to their customers and sharing their platform with our own LPs, it became obvious that what they were building was not only relevant but also capable of addressing a structural shift in the market.”
ScaleUp wound up participating in Canalyst’s Series B in January 2020, alongside existing investor Vanedge Capital, and immediately began delivering value beyond the check it had written. “The ScaleUP team are incredibly well connected and were very helpful in introducing us to some key players on the buy side and the sell side,” says Hot. “Christian was totally engaged. I remember he would send me news about our competitors along with his analysis of what it meant for our business. He was always looking out for us and providing helpful insights.”
Since ScaleUP’s initial investment, Canalyst quintupled its full-time employee headcount from 50 to 250. Among its current employee pool, Canalyst reports a diversity rate of 25 percent. In 2021, Canalyst was named one of Canada’s top growing companies by The Globe and Mail.
In May 2022, Hot and his team were approached by Tegus, a primary research platform for institutional investors, about a potential acquisition. While there had been numerous offers in the past, when Tegus offered them in excess of $400 million for the business, they couldn’t say no. The deal closed in August 2022.
“Damir and James built an incredible business,” says Grunt. “They’re competing with everyone from Bloomberg to the large equity research departments at global banks, and they’re winning. I’m not at all surprised that Tegus wanted to join forces with them. Together they’re building a buy-side cloud servicing public and private asset managers.”
Ultimately, ScaleUP Ventures received the VC Regional Impact Award for Western Canada for its work with Canalyst. Their investment in Canalyst is one of the largest, through leading the Series B and participating in the Series C, alongside Dragoneer Investment Group, and CPPIB. The exit represents a very significant return for its LPs. “It’s been one of our best-performing assets and we’re very proud to have worked with the entire Canalyst team,” says Grunt.