St. John’s-based CoLab Software has raised a US$21 million, or C$28.6 million, Series B funding round led by New York’s Insight Partners, with plans to use the money for a commercialization push and “big swings” on AI.

The raise comes on the back of tenfold revenue growth since CoLab raised its Series A in 2021, CEO Adam Keating said in a statement posted to social media. The latest deal also included Y Combinator, which the company graduated from previously, as well as returning investors like Mark Dobbin’s Killick Capital and Newfoundland and Labrador pre-seed fund Pelorus VC, Keating added.

In a separate statement, CoLab said it will use the money to hire 30 to 40 new employees. It now has nearly 100 staff, according to LinkedIn data.

“We’ve experienced such an aggressive market pull in the last 12 months that we can no longer keep up -- so we need to expand to help more engineering teams and keep leading the way with our (development team),” wrote Keating.

He added that the St. John's maker of collaboration software for 3D modelling has plans to offer customers new, AI-based tools that only recently became feasible with existing technology, and which part of the raise will also go towards funding.

“Some of the big bets we dreamed of in 2017 are now no longer dreams,” said Keating. “With the power of AI, they are actually quite achievable — we believe now is the time to go get it.”

CoLab has become a star of Newfoundland’s IT ecosystem since Keating co-founded the business with CTO Jeremy Andrew in 2017, and its US$17 million Series A was one of the largest funding rounds in Atlantic Canada that year.

More recently, Keating’s team has inked sales deals with blue chip automotive and heavy equipment players like Ford and Komatsu.

The Ford deal, for example, involves the carmaker using CoLab’s system in its Ford Pro department, which makes fleet management software and hardware. Ford Pro’s design team, based in Europe, saw its overall work timelines cut by around 30 percent when it implemented CoLab’s technology, Keating has said previously. Ford credited the newfound ability for its teams to collaborate remotely and across time zones with much of that improvement.

“By applying machine learning and generative AI, we can enhance and extend the value of CoLab’s core platform for mechanical engineering teams,” said CTO Andrews. “We’re excited to accelerate delivery of these solutions, as a result of this funding round.”

CoLab’s latest round also brings the total equity funding raised by startups in Atlantic Canada since the beginning of April to in excess of $30 million, which is more than the entire fourth quarter of last year. The trend reversal comes amidst a VC market that remains tight nationally and globally, with analysts at PitchBook forecasting less than three percent annual growth through 2028.