Author: Vertu Capital

Press Release

Vertu Capital Raises more than $300 Million for its Inaugural Fund

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Vertu Capital Raises more than $300 Million for its Inaugural Fund

TORONTO – March 22, 2023 – Vertu Capital, a private equity firm specializing in global enterprise software companies, is pleased to announce the close of its inaugural fund, Vertu Partners Fund I, with more than $300 million in capital commitments from a broad range of high-quality institutional investors. The Fund was oversubscribed with commitments exceeding its original hard cap.

Founded in 2017 by Lisa Melchior, a leading private equity technology investor in Canada, Vertu leverages its deep network and sector expertise to pre-emptively identify attractive investment opportunities and meaningfully partner with software and software-enabled companies to grow their businesses and deliver robust returns to investors.

“This is an exciting time to be in the market with new capital to deploy. The current vintage of mid-sized software businesses is well-positioned to differentiate themselves in the current market, and we are actively sourcing those well-run, profitable enterprises that are primed to scale,” said Vertu Founder and Managing Partner, Lisa Melchior. “Our investors share our vision and belief in our team and strategy, and we are deeply gratified to have such impressive and well-regarded LPs in our inaugural fund.”

Vertu received strong support from a diverse range of high-quality Canadian and US institutional investors including New York State Common Retirement Fund, BDC Capital, BMO Capital Partners, funds managed by BMO Global Asset Management, CIBC, Export Development Canada, and Manulife Investment Management, as well as several established asset managers, family offices, and industry executives.  

To date, Vertu has completed two fund investments: Dejero Labs Inc., a global provider of critical communications technology, and PathFactory Inc., an intelligent content platform for B2B digital marketing.

About Vertu Capital

Vertu Capital is a Toronto based private equity firm that invests in high potential global technology companies. Vertu partners with the management teams of market leading and scaling companies to accelerate and support the next stage in their growth strategy. Founded by Lisa Melchior, former Managing Director with OMERS Private Equity, Vertu has decades of global tech private equity experience with deep domain expertise in software and software enabled business models. Vertu’s team brings sector best practices, actionable value creation strategies and a deep network to optimize company performance through all phases of growth.  For more information, please visit www.vertucapital.ca.

Vertu Media Contact

Contact:  Laura Auquilla

Email:     lauquilla@vertucapital.ca

In the Media

BNN Bloomberg: Thousands of Canadian tech names are becoming attractive for private equity this year: Vertu founder

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BNN Bloomberg: Thousands of Canadian tech names are becoming attractive for private equity this year: Vertu founder

Lisa Melchior, founder and managing partner at Vertu Capital, joins BNN Bloomberg to discuss her outlook for investing in the Canadian tech sector following the SVB banking saga. Melchior says that macro economic factors have had a cooling effect in private equity over the past year, culling excess companies after a 10-year bull run. She discusses her criteria for tech investments and her hopeful outlook for private equity investments in Canadian tech this year.

See the interview here.

In the Media

CVCA Announces Winners of the First Canadian Women in Private Capital Awards

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CVCA Announces Winners of the First Canadian Women in Private Capital Awards

Mar. 08, 2023 by CVCA Staff

Toronto, ON – March 8, 2023 – The Canadian Venture Capital and Private Equity Association (CVCA) is pleased to announce the winners of the inaugural Canadian Women in Private Capital Awards, which celebrates exceptional women who have shown a dedication to professional excellence in the Canadian private capital industry.

The Canadian Women in Private Capital Awards are separate from CVCA’s general awards program and aim to identify, recognize, and celebrate the achievements and contributions of exemplary women in the industry. Winners will be recognized during a sold-out morning reception event, sponsored by CIBC Innovation Banking, in celebration of International Women’s Day.

CVCA’s Woman of Achievement Award recognizes outstanding Canadian GPs and their dedication to elevating the performance and leadership of women in the Canadian private capital industry. The winners of the Woman of Achievement Award have shown dedication to raising the bar for performance by women in the industry, have had a significant impact on innovation and value creation and have contributed meaningfully to improving gender diversity in the industry and beyond.

The 2023 winners of the CVCA’s Woman of Achievement Award are Whitney Rockley from McRock Capital, who won the award for venture capital (VC), and Lisa Melchior from Vertu Capital, who won the award for private equity (PE).

Whitney Rockley is a Co-Founder and Managing Partner at McRock Capital. With over 20 years of experience in the industry, Rockley has been instrumental in building McRock Capital into a leading investor in the digital industrial sector. She is also passionate about supporting women in entrepreneurship and as the first woman to serve as Chair of CVCA since its inception in 1974, she spearheaded the establishment of the inaugural taskforce on diversity and inclusion. This initiative was instrumental in creating CVCA’s Diversity and Inclusion committee that she skillfully led for many years. With a fervent conviction that diverse teams deliver superior performance, she is a powerful advocate for these initiatives within the technology and private capital communities.

Rockley has achieved several notable accomplishments in recent years. Rockley was instrumental in raising two oversubscribed funds for a total of CAD $200M. McRock has also made successful investments, with one of its portfolio companies, ThoughtTrace Inc., being acquired by Thomson Reuters in Q1 2022. Additionally, mnubo was successfully acquired by AspenTech in 2019 and Decisive Farming was acquired by Telus later that same year. Rockley was the Chair of the Board of Directors of Decisive Farming and a member of mnubo’s Board of Directors.

Lisa Melchior is a trailblazing Founder and Managing Partner at Vertu Capital, where she is the first woman in Canada to start a private equity fund. With over 20 years of experience in the industry, Melchior has invested more than $1.5 billion in 25 technology companies over the course of her career, becoming a well-respected figure in the private capital ecosystem. She is also a staunch advocate for promoting diversity in the industry, having built a highly diverse team, and having mentored many women in private equity over the past two decades.

Melchior has achieved several notable accomplishments in recent years. In 2021, Melchior and her team launched Vertu Partners Fund I, targeting growth to lower mid-market technology companies, a previously underserved market in Canada. Under Melchior’s leadership Vertu has grown quickly, having led several successful investments, with one of its portfolio companies, Firmex Inc, sold to strategic buyer Datasite in Q3 2021.

Read the full announcement here.

In the Media

Tough times are coming for private tech companies, but Canada can weather the storm

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Tough times are coming for private tech companies, but Canada can weather the storm

LISA MELCHIOR

CONTRIBUTED TO THE GLOBE AND MAIL

PUBLISHED JUNE 8, 2022

As pandemic-fuelled tech valuations drop down to earth and headlines warn of the “coming storm,” now is precisely when we need to step back and level set. It’s at times like these that, with a little perspective, fundamental value breaks through the fog of frothy markets, and that’s good news for Canada’s tech ecosystem and the broader economy.

As a 25-year veteran of private equity tech investing, I can tell you a few things with near certainty: that the window on aggressive fundraising for private companies has closed; that we can expect near-term write downs of recent high-growth venture and private equity-backed tech deals of 50 per cent or more; and that there will be a culling of the herd when it comes to unprofitable companies with a high cash-burn rate and a flavour-of-the-month value proposition.

I can also tell you that while the current situation has the markings of a typical boom-and-bust cycle, the macro reality is different. We all know that the pandemic supercharged technology adoption, but the underlying fundamentals and trend line remain the same; tech will continue to drive growth as the economy is increasingly digitized.

And as we stare down the barrel of rising interest rates, inflation and weakened growth, the business case becomes more compelling, particularly for certain kinds of technology. In a high-cost, competitive world, the efficiencies that can be gleaned from digitization and software automation will be essential for many organizations.

A tech company that epitomizes the intersection of innovation and fundamental value is Constellation Software (CSU-T), a $40-billion enterprise software provider that most Canadians have probably never heard of. (Full disclosure: I personally own Constellation shares.) I first met chief executive officer and founder Mark Leonard when I was part of the private equity team at OMERS, the Ontario pension fund, which invested in Constellation in 1995, just as the dot-com bubble was heating up.

Early on, Mr. Leonard saw the potential of acquiring and managing a stable of industry-specific, mission-critical software businesses, and when the tech bubble burst in 2000, we doubled down on our investment, providing Constellation with the firepower to grow quickly through down-cycle acquisitions. It was a spectacular investment, not only because of Mr. Leonard’s ability to execute and allocate capital, but because of the simple beauty of what some might deem a boring business.

Enterprise, or business-to-business (B2B), software is the backbone of our modern economy – its systems running everything from credit cards, cars and utilities to corporate payroll, insurance claims and supply chains. While it may not be sexy, its predictable revenue, low capital costs and high profit margins have translated into the best risk-adjusted returns of any tech asset class.

The good news is there is a healthy pipeline of these kinds of companies in Canada. According to Vertu Capital’s proprietary database, of the 40,000 software businesses in the country, we are actively tracking almost 600 enterprise software firms, up from fewer than 70 in 2017. And that pipeline is expected to expand significantly as the exponential growth we have seen in venture capital fundraising in Canada since 2018, not to mention foreign VC investing and bootstrapped startups, translates into solid, cash-flow-generating businesses.

Add in the deep talent pool – according to real estate services group CBRE, Toronto, Montreal and Vancouver are among the top five fastest-growing tech talent cities in North America (Edmonton and Ottawa rank sixth and eighth) – and Canada is well-positioned to weather the current tech storm.

Some of the best, most enduring tech companies were built in a down market. Think Google, PayPal, Salesforce and Shopify. Why? Because scarcity forces discipline and focus, investors become more discerning, and talent becomes easier to find.

So, for founders and CEOs who are building great Canadian tech businesses, my advice is to stick to your knitting. Make sure you have enough capital to support your business for the next 24 to 36 months and focus on profitability. Have a clear and well-articulated five-year plan and execute against it. The companies with strong business models and solid management teams will survive and thrive, and there are plenty of investors out there with the dry powder to support you.

Lisa Melchior is the founder and managing partner of Vertu Capital, a Toronto-based private equity firm specializing in Canadian B2B enterprise software companies.

Portfolio Companies

Vertu Capital Announces Investment in PathFactory

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Vertu Capital Announces Investment in PathFactory

Vertu exceeds $300 million in total transacted deal value year-to-date

Toronto, Ontario, November 8, 2021 – Vertu Capital, a private equity firm that invests in high potential, Canadian-headquartered global enterprise software companies, is pleased to announce a significant investment in PathFactory, a leading intelligent content platform for B2B digital marketing.

The acquisition is the third transaction for Vertu Capital so far this year, highlighting Vertu’s rapid growth and proven formula for pre-emptively identifying attractive technology investment opportunities and quickly delivering a significant return to investors and partner companies. The PathFactory acquisition brings Vertu’s total transacted deal value to more than $300 million year-to-date.

Over the course of 2021, Vertu has achieved the following milestones:

  • Acquired a majority stake in PathFactory in November
  • Completed the strategic sale of Firmex, a global provider of virtual data rooms, in July
  • Acquired a minority stake in Dejero, a leading global provider of critical communications technology, in April
  • Launched Vertu Partners Fund I, in March
  • Expanded its Investment Team and added to its roster of seasoned Operating Advisors, with the most recent addition of Jason Smith, Founder and Executive Chair of Real Matters, a real estate software company

“It has been an incredible year for Vertu, and the momentum is only growing. We launched Vertu with a very focused investment thesis and a belief that private equity investing could be done differently, and better. And we have delivered on that”, said Lisa Melchior, Managing Partner and Founder of Vertu Capital. “We’re in a technology super cycle, and it’s easy to deploy capital. What we do is leverage our deep domain expertise and extensive network to surface exceptional opportunities and invest with discipline. We bring a culture of integrity and true collaboration that appeals to high performance management teams, drives a step change in outcomes at our partner companies and delivers value quickly to our investors.”

“PathFactory is a classic Vertu investment,” added Melchior. “It is positioned to be a clear category winner in B2B digital marketing and content intelligence, a sector that has become mission critical for businesses since the COVID-19 pandemic triggered an acceleration in marketing spend to digital content. With its proprietary content intelligence, automation and unique end-to-end platform, PathFactory’s scalable software allows it to do what no one else in the space is doing.”

PathFactory is a leading innovator in the B2B digital marketing space. Its proprietary intelligent content platform leverages artificial intelligence and data to drive personalized and relevant marketing content that delivers meaningful and measurable B2B sales and revenue. Recognized as one of North America’s Technology Fast 500 by Deloitte and a “Cool Vendor” by Gartner, PathFactory clients include Fortune 500 companies such as Cigna, Verizon, Oracle, Nvidia, Honeywell, Adobe, HP, and Cisco Systems.

“Intelligent content is all about delivering the right content, to the right people, at the right time, and being able to do that at scale. It’s fundamentally about anticipating future needs in an intelligent and data-driven way,” said Dev Ganesan, President and CEO of PathFactory. “That is exactly what Vertu brings as our new lead investor and why we decided to partner with them. With their deep understanding of the platform, and proven ability to scale, they are the right partners at the right time to accelerate our growth potential.”

Alongside Vertu Capital, additional co-investors in PathFactory include BDC Capital, private equity funds managed by BMO Global Asset Management, and Nicola Wealth. 

About Vertu Capital

Vertu Capital is a private equity firm that invests in high potential, Canadian-headquartered global technology companies. Vertu partners with the management teams of market leading and scaling companies to accelerate and support the next stage in their growth strategy. Founded by Lisa Melchior, former Managing Director with OMERS Private Equity, Vertu’s partners have decades of global tech private equity experience with deep domain expertise in software and software enabled business models. Vertu’s team brings sector best practice, actionable value creation strategies and a deep network to optimize company performance through all phases of growth.  For more information, please visit www.vertucapital.ca.

About PathFactory

Leading enterprise and mid-market B2B companies use PathFactory’s Intelligent Content Platform to accelerate nurture, improve win rates, and understand content performance by delivering intelligent content experiences and virtual events across the buyer’s journey. PathFactory was named the inaugural Visionary CX ISV Partner of the Year award winner at the 2020 Oracle Markie Awards, recognized by Deloitte as one of North America’s Technology Fast 500, and ranked #13 on the 2020 Growth List of Canada’s fastest-growing companies. It was also named a Fall 2021 Content Experience Leader by G2, a 2019-2021 Top-Rated Content Marketing Software by TrustRadius, and a 2019 Cool Vendor in Technology Marketing by Gartner. Visit PathFactory.com to learn more.

Media Contact

Contact : Laura Auquilla

Email : lauquilla@vertucapital.ca

Portfolio Companies

BetaKit: FIRMEX ACQUIRED BY US-BASED DATASITE IN VERTU CAPITAL’S FIRST EXIT

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BetaKit: FIRMEX ACQUIRED BY US-BASED DATASITE IN VERTU CAPITAL’S FIRST EXIT

BY JOSH SCOTT

Toronto-based virtual data room (VDR) company Firmex has been acquired by fellow VDR provider Datasite. The financial details of the deal were not disclosed.

Created in 2020 with the sole purpose of helping to recapitalize Dejero, UbiDatasite has acquired 100 percent of Firmex from majority shareholders Vertu Capital and BDC Capital, and Firmex’s management. The acquisition comes about two and a half years after Toronto-based Vertu and BDC teamed up in early 2019 to acquire a majority stake in Firmex from Québec investor Novacap, Firmex’s only other investor aside from the company’s management team.

Real the full article here.

Portfolio Companies

Vertu Capital and BDC Capital Announce Strategic Sale of Firmex

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Vertu Capital and BDC Capital Announce Strategic Sale of Firmex

Exit highlights value generating partnership with high-growth tech firm

Toronto, Ontario,  July 26, 2021.  Vertu Capital, a private equity fund specializing in high potential, Canadian-headquartered technology companies, and BDC Capital are pleased to announce the strategic sale of Firmex, a global SaaS-based provider of virtual data rooms, to Datasite®, a leading SaaS-based technology provider for global mergers and acquisitions (M&A) professionals.

The sale comes just over two years after Vertu Capital, in partnership with BDC Growth Equity Partners Fund I, acquired majority ownership of Toronto-based Firmex, and marks Vertu’s first exit since the firm was launched in 2017. Since partnering with Vertu, Firmex has generated double-digit revenue and EBITDA growth. Its accelerated growth and sale to a strategic buyer underscores Vertu’s ability to quickly deliver value for high potential companies and investors.

“Our partnership with Vertu has been a game-changer for Firmex,” said Joel Lessem, Firmex CEO and Co-Founder. “Lisa Melchior and the Vertu team brought deep domain and operational expertise that allowed us to take what was already a fast-growing, market leading company, to the next level. Vertu not only understood the potential of our platform, but brought a collaborative and creative approach to partnering that allowed us to more fully realize the underlying value of the business. We could not have hoped for a better partner.”

Founded in 2006, Firmex is the world’s most widely used virtual data room provider, trusted by more than 4,200 companies in 110 countries, including leading global financial institutions, law firms, and governments. Firmex’s secure and intuitive SaaS solution allows for the sharing of large volumes of confidential documents and mission-critical undertakings, including financial transactions, litigation and compliance across a range of industries.

With its cloud-based offering and world class security, Firmex is positioned for continued strong growth as organizations look to enhance their online collaboration in a safe and secure environment.

“At Vertu, we take a very selective approach to the companies we invest in. Firmex was Vertu’s first investment, and we knew we had a winner.  They had an excellent management team, with a scalable technology and a unique SaaS-based operating model,” said Lisa Melchior, Managing Partner and Founder of Vertu Capital. “This strategic sale highlights the success of our investment thesis, and I am very pleased to be delivering significant value for our investors.”

“We are proud to have supported Firmex in its growth journey and it has been a pleasure working with Joel, Lisa, and the entire team over the last few years to help scale a Canadian leader,” added Loren Rafeson, Partner, BDC Growth Equity Partners. “We look forward to following the next phase of Firmex’s growth.”

The Firmex sale follows Vertu’s most recent investment in Dejero, a Waterloo, Ontario-based global provider of live video and real time data solutions. Vertu led a $60-million recapitalization of Dejero in April, 2021, taking a minority stake in the company. The Dejero investment is the first to come out of Vertu’s inaugural fund, Vertu Partners Fund I.

About Vertu Capital

Vertu Capital is a private equity firm that invests in high potential, Canadian-headquartered global technology companies. Vertu partners with the management teams of market leading and scaling companies to accelerate and support the next stage in their growth strategy. Founded by Lisa Melchior, former Managing Director with OMERS Private Equity, Vertu’s partners have decades of global tech private equity experience with deep domain expertise in software and software enabled business models. Vertu’s team brings sector best practices, actionable value creation strategies and a deep network to optimize company performance through all phases of growth.  For more information, please visit www.vertucapital.ca.

About BDC Capital

BDC Capital is the investment arm of BDC—Canada’s only bank devoted exclusively to entrepreneurs. With over $3 billion under management, BDC Capital serves as a strategic partner to the country’s most innovative firms. It offers a full spectrum of risk capital, from seed investments to growth equity, supporting Canadian entrepreneurs who wish to scale their businesses into global champions. Visit bdc.ca/capital.

Media Contact

Contact : Laura Auquilla

Email : lauquilla@vertucapital.ca

Portfolio Companies

BetaKit: VERTU CAPITAL SECURES MINORITY STAKE IN DEJERO WITH $60 MILLION INVESTMENT

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BetaKit: VERTU CAPITAL SECURES MINORITY STAKE IN DEJERO WITH $60 MILLION INVESTMENT

BY JOSH SCOTT

Waterloo-based company Dejero, which provides communications connectivity tech, announced a $60 million CAD minority recapitalization deal led by Toronto’s Vertu Capital. The investment, which will see Vertu acquire a minority stake in Dejero, was supported by Ubicom Ventures.

Created in 2020 with the sole purpose of helping to recapitalize Dejero, Ubicom is a special purpose investment fund managed by three Bay Street investors in partnership with Dejero’s founder Bogdan Frusina and CEO Bruce Anderson.

Real the full article here.

Uncategorized

Globe & Mail: Vertu Capital picks Waterloo tech firm Dejero for first fund investment

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Globe & Mail: Vertu Capital picks Waterloo tech firm Dejero for first fund investment

SEAN SILCOFF, TECHNOLOGY REPORTER

PUBLISHED APRIL 21, 2021

A fledgling private-equity firm, led by veteran Bay Street technology financier Lisa Melchior, has made the inaugural investment out of its first fund, leading the purchase of a $60-million stake in Waterloo, Ont., communications connectivity technology provider Dejero Labs Inc.

Ms. Melchior previously spent 17 years with the Ontario Municipal Employees Retirement System (OMERS), where she was a vice-president overseeing the pension giant’s private-capital investments in the technology sector, including its early stake in Constellation Software Inc. Ms. Melchior was on the board of Constellation, now one of Canada’s most valuable technology companies, when it went public in 2006. She also led the privatization of Quebec software company Logibec in 2010 and subsequent spinout of its U.S. subsidiary MatrixCare. OMERS sold the Canadian operations of Logibec to GI Partners in 2015.

Read the Full article here.

Uncategorized

Vertu Capital Leads $60 Million Recapitalization of Dejero to Accelerate Growth

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Vertu Capital Leads $60 Million Recapitalization of Dejero to Accelerate Growth

Toronto, Ontario, April 21, 2021 – Vertu Capital, a Canadian private equity fund focused on technology platforms seeking transformational growth, is pleased to announce it has led a $60 million minority recapitalization of Dejero Labs Inc. (“Dejero”), a leading global provider of resilient connectivity for critical communications. Vertu partnered with Ubicom Ventures, a special purpose investment entity in partnership with Dejero management, to complete the transaction and pave the way for accelerating the company’s product and market expansion. Dejero will be the first investment for Vertu’s inaugural fund, Vertu Partners Fund I.

Founded by Bogdan Frusina in 2008 and led by Chief Executive Officer Bruce Anderson, Dejero is headquartered in Waterloo, Ontario, one of Canada’s key tech hubs, with offices in the U.S. and UK, and a global distribution network.  The company’s live video and real-time data solutions are used by leading broadcasters, media production companies, public safety and government agencies, along with enterprise customers who need uninterrupted connectivity for their critical applications.

“Canada’s technology ecosystem is thriving, and we are excited to be playing a vital role by actively partnering with premier companies that are at critical points of inflection in their growth and scale,” said Lisa Melchior, Founder and Managing Partner of Vertu. “Dejero exemplifies an ideal Vertu investment; the company has an established world leading technology solution and is accelerating its expansion into multiple global markets. We are thrilled to be partnering with Bruce, Bogdan and the entire Dejero management team on this exciting new chapter for the company.”

“Vertu was the perfect partner for us. They bring deep software sector expertise and decades of experience investing in large global tech businesses, so they understand where Dejero is heading,” Mr. Anderson said. “We are excited to collaborate with the Vertu team on our plans to accelerate our growth.”

“We are thrilled about the opportunity that Dejero brings to our investors,” said Ubicom Managing Director Terry Thib. “Our mission is to identify disruptive technologies that can be deployed on a global scale. Through our partnership with Bruce and Bogdan, we are excited to play a critical role in the evolution of Dejero as it continues to tackle burgeoning critical connectivity markets that will benefit from its cutting-edge technology.”

With this transaction, Dejero remains a Canadian owned business.

About Vertu Capital

Established in 2017 by veteran technology private equity investor Lisa Melchior, Vertu Capital is a private equity firm that invests in high potential Canadian headquartered technology companies. Vertu seeks to partner with management teams of market leading and scaling companies that are looking for an experienced investor and thought partner to actively collaborate with them to achieve great things at a rapid pace. Vertu’s partners have decades of global tech private equity experience with deep domain expertise in software and software enabled business models. We are focused on the achievement of a company’s long-term goals, offering extensive knowledge valuable through all phases of growth.  For more information, please visit www.vertucapital.ca.

About Ubicom

Ubicom Ventures Ltd. is a special purpose investment fund established in 2020. Managed by veteran investors Terry Thib, Neil Maruoka, and Gajan Kulasingam, and in partnership with Dejero founder Bogdan Frusina and CEO Bruce Anderson, Ubicom was created with the sole purpose of participating in recapitalization of Dejero. Terry, Neil, and Gajan have decades of capital markets experience investing across the entire capital spectrum including both private and public debt and equities.

About Dejero

Driven by its vision of reliable connectivity anywhere, Dejero aggregates diverse connectivity paths including LTE and 5G cellular, satellite and broadband into a virtual ‘network of networks’ to deliver enhanced reliability, expanded coverage, and greater bandwidth using cloud-based technology. A two-time technical Emmy® Award winner, Dejero is trusted to solve the mission-critical live video transport and real-time data transfer challenges of organizations around the world. Founded in 2008, privately held Dejero is headquartered in Waterloo, Ontario, Canada. For more information, visit www.dejero.com.