Tom Gilgan laughed and shook his head. “Oh no,” said the co-founder and CEO of G2 Research of Dartmouth. “We’re not a Radian6. But what we’re happy about is we did this with a company we started from nothing.”
The “this” Gilgan referred to was his geo-location software company’s successful sale to Track Group of Salt Lake City for $4.6 million in November.
The G2 Research sale exemplified a trend that developed in 2014, which could be called the Year of the Modest Exit.
There was nothing like Radian6’s $326-million sale to Salesforce in 2011, or the $540-million sale of Ocean Nutrition Canada to Royal DSM of the Netherlands in 2012. But there was a steady stream of modest and profitable exits that are benefiting the region by companies that, for the most part, bootstrapped throughout their existence.
What it means is that these Atlantic Canadian startup teams have become divisions of larger companies, and the resources of the larger firms have allowed them to keep growing here. It means the region is linked to the global tech community through these companies and their investors.
Meanwhile, the founders of these exited companies have become resources for the community. They have various levels of visibility, but these are now entrepreneurs who have been through one or more exits and can help younger people.
Finally, it means capital is flowing quietly into the region. How much isn’t known because most of the deals didn’t reveal prices. However, the total is probably in the tens of millions of dollars and could approach $100 million. It means the people benefiting from this — including the New Brunswick Innovation Foundation — have more money to reinvest in other startups.
G2 Research’s $4.6-million cash and stock deal certainly fits into this trend, but it is not alone.
In January, UserEvents, a Fredericton startup whose technology alerts corporations when customers are having trouble with online transactions, said it would be bought by LiveOps. The buyer is a Redwood City, Calif., provider of cloud contact centre and customer service solutions.
Neither buyer or seller or the foundation, an investor in the New Brunswick company, revealed the details of the deal.
UserEvent’s CEO Jeff Thompson has since taken the role as chairman of the regional accelerator group Propel ICT.
Compilr, a Halifax startup that teaches people how to code, said two months later that it had been acquired by lynda.com, a Carpinteria, Calif., online education company. Again, no details were revealed.
CEO Patrick Hankinson and his chief technology officer Tim Speed have continued to develop the product, but they’re also involved as funders and/or developers in other startups.
Bedford’s NewPace Technology Development Inc. was bought in June by NewNet Communications Technologies of Arlington Heights, Ill., greatly expanding the sales power of the mobile technology developer.
NewPace, headed by founder and CEO Brent Newsome, became a subsidiary of the NewNet messaging division, based in Amsterdam, and changed its name to NewNet Canada. NewNet, which is a portfolio company of Los Angeles private equity firm Skyview Capital, did not reveal financial details.
Finally, ClinicServer, a Saint John company that helps health clinics digitize their operations and records, was taken over by Biosign Technologies Inc., a publicly traded Toronto company with complementary businesses.
The buyer paid $1.96 million — all in stock, except for $75,000 in cash. The deal allowed ClinicServer to retain its brand and New Brunswick headquarters and to operate as a wholly owned subsidiary of Biosign.
It’s interesting that virtually none of the companies had taken on outside investors. The most notable investment was $250,000 in UserEvents from the New Brunswick foundation, less than a year before it sold out.
Disclaimer: Entrevestor receives financial support from government agencies that support startup companies in Atlantic Canada. The sponsoring agencies play no role in determining which companies and individuals are featured in this column, nor do they review columns before they are published.
