Vanedge Capital Wins 2023 VC Deal of the Year Award for Canalyst
In 2015, Damir Hot and James Rife set out to address a number of inefficiencies they had identified in the equity research and investment management space. Initially working out of a basement in Vancouver, the pair built a database of forward-looking fundamental models on public companies. The result was Canalyst, a business that would eventually become the leading provider of data and analytics on listed companies.
“Canalyst streamlines investor and finance professional workflows, saving them time while delivering better data,” says Hot, the company’s Co-Founder and CEO. “Today, our platform is trusted by hundreds of institutions around the world, including most of the largest investment managers and corporations.”
Of course, getting to that point not only took a huge amount of work, but also outside capital. “After bootstrapping the business ourselves that first year, we decided to go out and raise a seed round to help accelerate our growth,” recalls Hot. “Once we reached that point, I knew exactly who to call.”
Hot had long known the team at Vanedge Capital, an early stage venture capital firm based in Vancouver, having been mentored by one of the firm’s partners, Moe Kermani, as an undergraduate. Hot went on to work at Kermani’s company and subsequently joined one of Vandege’s portfolio companies.
Ultimately, Vanedge issued a term sheet in 2016 and became Canalyt’s lead seed investor. “We always had a lot of confidence in Damir and James,” says Paul Lee, Managing Partner at Vanedge. “It was clear to us that they were filling a gap in the market by democratizing access to advanced equity quantitative models. They knew exactly what they wanted to do and had the conviction to make it happen.”
Over the course of the next seven years, Vanedge invested in the company several more times and proved to be a valuable resource to Hot and his team. Lee also served as a board member, providing mentorship, guidance, and help recruiting key fellow board members Aron Miodownik and John Montalbano. “Paul delivered a ton of value,” says Hot. “He had a clear passion for our business and it always felt like we were on the same page no matter what happened. The Vanedge team was always supportive and consistently delivered the clear, actionable advice we needed.”
The company also grew exponentially during that time, consistently experiencing 100 percent growth year over year, while also opening an office in New York and expanding its headcount to over 250 people.
In May 2022, Hot and his team were approached about a potential acquisition. “We’d been presented with numerous exit opportunities over the years and Vanege always had our back, giving us the latitude to do what we thought was best,” says Hot. While Hot and his team declined earlier interest from Tegus, a primary research platform for institutional investors, when the company came back to the negotiating table with a price north of $400 million, they couldn’t say no. The deal closed in August 2022.
“At a time when the tech sector was melting down and tech company valuations were down by 25 percent, we were able to work with Canalyst to facilitate a sale that delivered a strong return,” says Lee. “That really speaks to the value that the platform delivers.” Ultimately, Vanedge Capital received the VC Deal of the Year Award for its work with Canalyst.
“Vanedge really took a chance on us,” says Hot. “Back when we started out, there weren’t many VCs issuing term sheets for two guys with an idea and a couple of Excel spreadsheets. Vanedge saw our vision and gave us the support we needed to thrive and reach a great outcome.”
“We’re incredibly proud of Damir, James, and the team,” says Lee. “The work they’ve done is extraordinary and isn’t just a win for them, but also for the entire Vancouver tech ecosystem. We’re also incredibly appreciative of the hard work of the other board members, particularly Aron Miodownik and John Montalbano, for their mentorship of Damir and James and their time helping get the team to its successful exit. This award is a great honour for the whole Vanedge team because we work collectively as a team on every deal.”