John Baker, the President and CEO of Desire2learn, photographed on June 17, 2011.Jennifer Roberts/The Globe and Mail
Desire2Learn Inc., one of Canada's hottest technology growth companies, has raised another $85-million from venture capital investors to supports its quick expansion.
The new money from a Series B round of funding comes from new investors including Columbus Nova Technology Partners Graham Holdings as well as existing investors that include Toronto-based OMERS Ventures. It follows an $80-million Series A round in 2012.
Chief executive officer John Baker would not disclose the valuation, but he said that it is "up significantly" from the first round, and that the valuation would make Desire2Learn one of the larger technology companies in Canada. The external investors are still minority shareholders, he said. That implies the company is worth at least $330-million – but quite likely more.
Desire2Learn's niche is using technology to personalize education, and to enable students to use their devices to create more interesting and engaging learning. (Here's a good look at the company.) One area that the Waterloo, Ont.-based company is now exploring is game-based learning, which builds lessons into video games and tries to hook students by making them compete. The company is also increasingly looking at the corporate learning markets as companies look to educate and develop their workforces.
The money from the new financing will allow Desire2Learn to "accelerate the work we're doing in the space – extending our cloud-based learning program into mobile devices, [and building] new analytics for learning," Mr. Baker said. The company can now "really drive putting the investment into R&D and growth, globally."
The company was introduced to new investors by Allen & Co., the small New York investment bank with an outsized business in technology. Allen was an underwriter for the initial public offerings of Google Inc. and Twitter Inc., and worked on Facebook's purchase of mobile instant messaging software WhatsApp.
Desire2Learn wasn't in a rush to raise money. For the first 13 years after Mr. Baker founded it, the company was self-funding. However, bringing more capital in now "gives us the flexibility to invest in next generation technology, high growth globally, and also gives us options to make other investments as needed," he said.
The company's growth goals include going from 50 million learners using its technology to 100 million around the world. It has users around the world now, from Finland to New Zealand.
"Growth is very important for us," Mr. Baker said. "But at the same time I feel like we are just getting warmed up. This is not an industry that is mature. We're at a very early stage of adoption of the technology. There's a huge wave coming in the future."
The company has expanded in less than four years from 200 employees to 800, and it's looking for another 100. "If they could start tomorrow we would hire them," Mr. Baker said.
Desire2Learn is often listed among the tech companies that could be getting ready to go public, but with new money in the coffers, there will be no rush. Canadian technology companies have been staying private longer, and are finding no trouble raising money privately at much higher valuations than in past. (Late last year, Shopify became the first Canadian private technology company, that we know of, to raise money at a valuation topping $1-billion.)
"Right now, we are head-down – just building a great company, an enduring company," Mr. Baker said. "There are no immediate plans for an IPO."