The Apple Inc. logo on a window outside of its flagship store in New York.MIKE SEGAR/Reuters
Apple Inc. has staked its first presence in Vancouver with the purchase of Buddybuild, a three-year-old startup that designs software tools for mobile app developers.
Buddybuild was co-founded in early 2015 by Dennis Pilarinos, who previously held senior positions in Vancouver at Amazon.com Inc. and Microsoft Corp. Buddybuild was successful early on, drawing a range of customers, including Slack Technologies Inc., and financing from Kleiner Perkins Caufield & Byers, a top Silicon Valley venture capital firm.
Mr. Pilarinos and Buddybuild were also resolutely Canadian. A primary stipulation of the Kleiner Perkins financing was that Buddybuild stayed in Canada. Buddybuild, on its website, describes its products as "lovingly handcrafted in Vancouver, B.C." Buddybuild's work force doubled to about 40 people in the past year. They will join Apple's Xcode engineering group, which builds development tools for the Cupertino-Calif.-based company's products.
The arrival of Apple in Vancouver, with the establishment of a small engineering hub, follows the northward expansion of the biggest internet players in the United States. Amazon recently announced it would double its downtown work force to 2,000 people in the next several years. Microsoft in 2016 opened a development centre downtown with room for 750 people. Facebook Inc. is moving to a larger downtown location this year.
Beyond geography, the business backdrop to Apple's acquisition of Buddybuild is the ever-expanding mobile computing universe, and the competition between heavyweights Apple, with its iPhones, and Google Inc., with its Android operating system. Apps are an important factor to draw customers to smartphones. In a blog post, Buddybuild said Android app development will be discontinued on March 1.
"It's clear that mobile is where we do most of our computing," Buddybuild investor Kleiner Perkins said last year. Buddybuild's technology is "far superior" to competitors, it added.
Buddybuild gives developers more control over the evolution of their apps – such as connecting with users about problems and making adjustments.
One offering is an "instant replay," which lets developers watch a video of their app in action in the moments before it crashes, to help understand what went wrong, similar to a hockey team watching the replay of a goal scored against it.
The terms of the Apple-Buddybuild deal were not disclosed. Apple declined comment. Buddybuild and Mr. Pilarinos did not respond.
"We've always been proud to be a Canadian company, so we're pleased that we will be staying right here in Vancouver – a hotbed of developer and engineering talent," Buddybuild said in a brief announcement on its website.
Stewart Butterfield, CEO of Slack, was an adviser to Buddybuild from the beginning. He offered his congratulations to Mr. Pilarinos on Twitter. Mr. Butterfield also highlighted that "now Apple has a Vancouver office," punctuated by a smiley face.
The Vancouver tech scene is evolving. Leading local companies such as Hootsuite Media Inc., among others, had been expected to go public but it hasn't yet happened. At the same time, Vancouver has become a burgeoning base for large U.S. companies.
Mr. Pilarinos and Buddybuild will be a good start in Vancouver for Apple, said Boris Wertz, head of local venture capital firm Version One. Mr. Pilarinos has a history of growing and running operations at large companies, as well as from scratch in the startup world. It is a rare combination, said Mr. Wertz, who is a friend of Mr. Pilarinos but not a Buddybuild investor.
"Dennis is the perfect guy," Mr. Wertz said. "He can continue the startup spirit and build a development office. There's no better launchpad for Apple to build a development office in Vancouver."
Kleiner Perkins led Buddybuild's Series A financing of $7.6-million in May, 2016. The round also included Valley-area investors First Round Capital, Bloomberg Beta, and Amplify Partners, who led Buddybuild's $1.2-million seed round in early 2016 as the company got off the ground.
Kleiner Perkins declined comment on Wednesday.
Mr. Pilarinos cofounded Buddybuild with two other Vancouver-based Amazon alumni, Christopher Scott and Johnny Shi. At Amazon, Mr. Pilarinos led work on the browser for Amazon's Kindle tablet and Fire phone. At Buddybuild, he was able to leverage his Amazon connections to hire staff.