A quick study of the Portfolio page on the East Valley Ventures website tells an interesting story about how the Saint John-based investment group has been quietly exiting some companies and investing in others.
In fact, the page shows that East Valley has had three exits in the past 15 months, capped by the year-end sale of Saint John-based Cirrus9 to Toronto’s Carbon60. It was preceded by the sales of Victoria, B.C.-based Tutela Technologies in September 2019 and Barrie-Ont.-based gShift in October 2018.
These have helped the East Valley members to back new companies. At a time that many in the region bemoan the lack of angel funding, East Valley Ventures added three new companies to its portfolio in 2019.
“Two of the three exits provided attractive returns for EVV,” said East Valley Co-Founder Gerry Pond in an email Thursday. “The gShift exit was not material, but provided the company with a growth path.”
East Valley Ventures is an angel investment group, but also a division of a corporation. Its parent is Mariner, the Saint John-based tech conglomerate whose core technology xVu improves the delivery of videos online. Here are its three recent exits:
1. Cirrus9 – This company operates data centres, managed enterprise cloud infrastructure and related hosting services and support. It was never a typical target for angel investment as the company was not developing its own technology, but East Valley saw a business opportunity in backing CEO Fred Bullock’s growing business. East Valley’s Bob Justason served on the Cirrus9 board.
In December, Cirrus9 was purchased by Carbon60, which is backed by Boston private equity firm M/C Partners.
2. Tutela Technologies – East Valley Ventures invested in Victoria, B.C.-based Tutela several years ago, marking the first time EVV members backed a company outside Atlantic Canada. Tutela gathered data on mobile infrastructure, helping mobile phone providers to understand and improve their networks.
East Valley invested in the company mainly as a strategic investment for Mariner, and the investment paid off. In early September, it was bought for an undisclosed price by Boston-based Comlinkdata, a mobile phone data company owned by the private equity firm Alpine Investors.
3. GShift – The story of East Valley’s involvement with gShift dates back to 2013, when East Valley and Innovacorp invested $490,000 in Halifax-based InNetwork, which used a network of influencers to help clients amplify their marketing efforts. Pond became Chair of the InNetwork Board.
In March 2016, InNetwork was acquired by gShift, a company that enhanced search engine optimization through big data and predictive analytics. It was an all-stock deal, so gShift became part of the East Valley portfolio.
GShift was then purchased in October 2018 by Mintent Software Corp., a Vancouver-based maker of content marketing software.
The East Valley website now lists 11 exits, ranging from home runs like the 2011 exits of Q1 Labs and Radian6 (which totaled more than $1 billion) to a few with negligible returns.
It’s worth noting East Valley is plowing money into young companies. Last year it backed Halifax-based cleantech company Aurea Technologies, Halifax-based cybersecurity company Byos, and Fredericton-based eChart Healthcare.
“We really feel optimistic about our current portfolio,” said Pond. “With a few exceptions, all are strong contenders in their fields.”
Disclosure: Aurea Technologies’ CEO is the daughter of the owners of Entrevestor.