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Vancouver business intelligence software seller Klue Labs Inc. has raised US$15-million in venture capital, joining a growing number of companies that have completed financings during the pandemic despite meeting investors only online.

Klue chief executive Jason Smith said the startup had intended to start fundraising in the second quarter. It was coming off its second straight year of tripling revenues, selling software that uses artificial intelligence to help corporations gather information on competitors from the internet and internal systems like Slack and e-mail. Klue has more than 100 customers, including Cisco Systems Inc., SurveyMonkey, Red Hat Inc. and Shopify Inc., and close to 50,000 individual users.

Then, as COVID-19 shut the economy in March, Mr. Smith and co-founder Sarathy Naicker, a veteran technologist, realized “we need to get serious now” about financing, Mr. Smith said.

At the time, venture capitalists were largely doing triage on their existing portfolio companies, pumping money into only those they had already backed – often at lower valuation levels than prior funding rounds – or making new investments only in firms they’d already met. With restrictions on travel, that put many startups seeking funds in a bind.

Mr. Smith said the U.S. venture capitalists he’d previously met initially turned him down when he pitched them in March. His advisers told him to hold off fundraising. “I had the countertheory that we had to do it now, because [the funding environment] will only get worse,” said Mr. Smith, a serial entrepreneur who was previously president of Vision Critical Communications Inc.

His gambit worked. Klue said it had the biggest first half in its history for the period ended June 30 (the private company does not disclose financial data). With its customers facing uncertain prospects, trying to hold on to existing business and win new sales in an uncertain climate, demand increased for Klue, Mr. Smith said. “I am bullish that we’ve got a solution that can help people right now when they’re chasing revenue.”

Valuations of public tech companies took off as investors bet they would benefit from increased use of digital channels. Some tech companies, including Canada’s Dye & Durham Ltd., completed successful initial public offerings after taking investor “road show” meetings entirely online. Montreal payments processor Nuvei Corp. is now doing the same for its IPO. Adena Friedman, CEO of Nasdaq Inc., told digital media company The Information on Wednesday that IPOs are increasingly being done this year in shorter periods through virtual road shows.

By the end of April after meeting investors only through Zoom, Mr. Smith had three term sheets offering to lead the deal. Craft Ventures, headed by veteran Silicon Valley operator David Sacks – who Mr. Smith got to know through video calls – ended up leading the deal, its first in Canada, with participation from U.S. venture capital firm HWVP, existing investors OMERS Ventures, Rhino Ventures and BDC Capital and others. Mr. Smith said Klue didn’t have to reduce its valuation to get the deal done.

“With their pedigree and extreme capital efficiency, coupled with their growth, I think they had an easier story than most in putting together a remote road show,” said HWVP managing director Lars Leckie.

Mr. Sacks said “there was really nothing to overcome” getting to know the company virtually. In fact, he said, he spent more time with the company and its customers in Zoom calls than if they’d been required to travel to meet them all.

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