CDPQ's Year-End Innovation Blitz

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In a flurry of year-end deals, CDPQ is going long innovation. First, today, AppDirect and CDPQ partner to launch AppDirect Capital: 

AppDirect®, the leading subscription commerce platform company, and Caisse de dépôt et placement du Québec (CDPQ)1, a global investment group, today announced an investment of USD 80 million (CAD 100 million) to launch AppDirect Capital, which offers a set of innovative funding programs dedicated to the growth and transformation of channel partners. CDPQ’s investment will accelerate AppDirect Capital’s AppSmart Invest program, previously launched this year, which provides flexible capital for technology partners to transform or scale their business with AppSmart, as well as other forthcoming financial products.

AppSmart, a division of AppDirect, is exclusively dedicated to helping channel partners and technology advisors start and scale their recurring revenue businesses. Technology partners who participate in the AppSmart Invest program maintain 100% ownership and control of their business while gaining access to the AppSmart brand, digital back office tools, and the AppSmart Marketplace to offer their clients a vast ecosystem of software and business services.

“Our growing network of technology advisors has seen unprecedented demand for cloud and connectivity in recent years. With the launch of AppDirect Capital, we will be able to bolster our AppSmart Invest program while building a catalog of financial products to help advisors grow and scale their business," said Daniel Saks, Co-Founder and Co-CEO of AppDirect. "AppDirect Capital is purpose-built for channel partners and offers them simple, hassle-free access to funding that enables them freedom to grow their business on their terms.”

“AppDirect has established itself as a subscription commerce platform at the forefront of innovation and agility, carving out a leading position in this rapidly growing market,” said Martin Laguerre, Executive Vice-President and Head, Private Equity and Capital Solutions at CDPQ. “AppDirect Capital is backed by AppDirect’s proven business model, which we know well, and a high-value client base that uses its platform to drive its core business. With this new investment, CDPQ’s focus on performing technology-driven companies that accelerate the competitiveness of today’s businesses is magnified by our ability to deliver innovative and flexible alternative financing as part of our Capital Solutions strategy.”

“AppDirect has thrived over the past decade and is well positioned to capitalize on the complex needs of technology providers and their client networks,” said Alexandre Synnett, Executive Vice-President and Chief Technology Officer, CDPQ. “As a long-term partner who supports promising technology companies at all stages of maturity and across asset classes, this complementary investment in the AppDirect Capital program reflects CDPQ’s conviction that new technology business models, such as subscription-based services and platforms, can fuel and sustain performance over the long term.”

Since its initial equity investment in 2020, CDPQ has been an active shareholder of AppDirect and partner to AppDirect as it continues to expand its business in Montréal.

With AppSmart Invest, channel partners gain access to a faster, less onerous, alternative to traditional M&A, as successfully undertaken by numerous other participants, including Global Communications Group, NXTSYS, On Track Communications, US Network, PSI Network and Netstar Communications. Interested advisors can find more information at appsmart.com.

“AppSmart Invest has been a complete game changer for us, allowing us to double down on our growth while keeping 100% ownership and control of our business,” said Dave Wallace, president of NXTSYS Consulting. “The investment has also allowed us to fund the development of an entirely new business that we believe will be transformative to our future - providing businesses with Extended Reality solutions - which wouldn’t have been possible otherwise.”

1 CDPQ is acting through a wholly owned subsidiary.

ABOUT APPDIRECT

AppDirect offers a subscription commerce platform that removes the complexity of building a recurring business model. Sell any product, through any channel, on any device—as a service. Our platform opens up endless opportunities for commerce innovation, giving businesses the freedom to grow. AppDirect also powers AppSmart, a B2B technology marketplace and ecosystem connecting technology buyers with expert advisors to make it easier to sell, buy and manage telecommunications, cloud and business services.

Headquartered in San Francisco, AppDirect is trusted by brands such as Microsoft, Google, Deutsche Telekom, Jaguar Land Rover, ADP, and many more.

You can read more on how AppDirect Capital aims at providing its technology partners with a more flexible form of financing to power their growth here.

Next, VOSKER raised a $100 million financing from several investors, including CDPQ:

VOSKER, a global pioneer in remote area monitoring technology, today announced it has raised $100 million in debt financing from HSBC Canada (“HSBC”), Caisse de dépôt et placement du Québec (“CDPQ”), Business Development Bank of Canada (“BDC”), and Export Development Canada (“EDC”). These funds will help support the company’s growth as a leader in this fast-growing tech space.

The funds consist of a mix of quasi-equity, subordinated debt, and revolving credit which will be used mostly towards accelerating growth through sales and marketing, new product development and investment in human capital.

VOSKER designs and commercializes cellular-connected devices that enable remote monitoring of areas where wi-fi and electricity are either not accessible or optimal. Billions of media files are produced each year with its various brands of devices, mainly geared towards security or the outdoor markets, and then seamlessly delivered to its customers’ computers and mobile phones. In addition, VOSKER offers premium memberships enabling customers to enhance their monitoring activities.

“Our products enable consumers to keep an eye on things that matter to them, no matter where they are,” said Yan Gagnon, CEO of VOSKER. “This new funding will allow us to continue on the rapid growth trajectory we’re on. We’ll double down on our existing strategy that is showing great traction while also investing to accelerate new market development.”

“HSBC is proud to support the international ambitions of high-growth Quebec companies like VOSKER,” said Alan Turner, Head of Commercial Banking at HSBC Bank Canada. “Our 1000 commercial banking professionals across the country are dedicated to the unique needs of international businesses, by providing access to a geographic network covering more than 90% of global trade and capital flows.”

“With this financing, CDPQ is supporting the expansion of a young Québec technology company that ranks alongside some of the fastest growing companies in Canada in recent years. The company is well positioned to maintain this growth and this investment provides the necessary flexibility to develop its products and expand the scope of its innovations,” said Kim Thomassin, Executive Vice-President and Head of Investments in Québec and Stewardship of CDPQ.

This transaction is part of Ambition ME, a suite of financing solutions and support services to take Québec mid-market companies to their next stage of growth. 

‘’With its disruptive technology and strong leadership team, VOSKER has become an important player in the Internet of Things (IoT) sector and a global leader when it comes to remote area monitoring solutions,’’ said Patrick Latour, Senior Vice-President, Growth and Transition Capital, BDC Capital. ‘’This financing will help further accelerate the company’s sustained growth.’’ 

“This is a great example of the collaborative efforts between EDC and industry partners to support Canadian companies with high growth potential,” said Lissa Bjerkelund, Vice-President, Investments & IFD (interim) at EDC. “We are pleased to partner with VOSKER as it expands its business internationally.”

About VOSKER

VOSKER, we’re proud to be one of the premier providers of solar-powered and cellular-enabled monitoring technology on the planet. Whether you want to keep a close eye on your lake house, or your company wants to secure its sites, we provide the tools to make you see further. People use VOSKER’s technology every day to take millions of photos and videos of remote places in over 50 countries. 

Founded in 2018, in Victoriaville, Quebec, our main products and services are marketed under the SPYPOINT and VOSKER brands. We are able to push the boundaries of what is possible thanks to our 400 talented employees.

Third, CDPQ and bp ventures announce collaboration and joint investment in BTR Energy:

Caisse de dépot et placement du Québec (CDPQ), a global investment group, and bp ventures today announced a new co-investment collaboration targeting ventures in the sustainable energy sector and their first joint investment, in BTR Energy, a cleantech company enabling electric vehicles to interact with electricity markets.

As part of this three-year collaboration, CDPQ and bp ventures will share investment opportunities and industry knowledge, with a focus on innovations that can accelerate the energy transition. Examples of areas of interest include mobility electrification, deployment and adoption of renewable energy, batteries, biofuels and more. 

The first CDPQ-bp ventures co-investment, which included additional co-investors Clean Energy Fuels, Innovatus Capital Partners, and SineWave Ventures, will support BTR Energy in growing its platform to help support the decarbonisation of the transportation sector by using data to enable interactions between electric vehicles and electricity markets. Today, BTR Energy’s “Bridge” platform automates participation in low carbon fuels programs, like California’s Low Carbon Fuel Standard, by connecting leading EV manufacturers, fleet operators, and charging station networks to renewable electricity generators. BTR Energy will use the proceeds from the investment to scale its existing operations and expand into new markets, including emerging clean fuels markets in Canada, the United Kingdom and Europe. 

“Now more than ever, investors are directing capital toward innovations that will allow us to fight and adapt to climate change. CDPQ is delighted to collaborate with a world-class player such as bp ventures to invest in energy technologies and companies that are accelerating the transition toward a low-carbon economy,” said Geneviève Bouthillier, Managing Director, Private Mid-Market Companies and Stewardship Investing at CDPQ. “Our co-investment in BTR Energy is a good example of what we aim to do with bp ventures: invest in promising companies that have demonstrated their capability to have a concrete impact, in order to propel their growth.”

Nacho Gimenez, Managing partner at bp ventures, said, “BTR Energy is exactly the type of game-changing business we look to invest in at bp ventures. They identified a value chain that could increase the clean electricity used in EV charging, developed an innovative solution to make it work and successfully deployed it. We welcome BTR Energy to our portfolio and look forward to working with the team, exploring ways to expand the company outside of its Californian base. It’s also our first investment with CDPQ, and an exciting first step for a collaboration that through shared knowledge and opportunities will help us continue to accelerate innovation across the entire energy spectrum.”  

“Our partnership with bp ventures and CDPQ will enable us to strengthen our core capabilities, expand into new low-carbon fuels markets in North America and Europe, and launch new, proprietary products designed to further reduce emissions by directly engaging EV drivers. Nearly a dozen EV manufacturers participate in programs like California’s Low Carbon Fuel Standard through the BTR Energy platform because we have a unique, expert understanding of the regulations and requirements, and because we provide a single, automated point of access to multiple programs,” said Jack Barrow, Chief Executive Officer, BTR Energy. “With this investment, we will continue to outperform in these markets while also committing resources to support new electrification initiatives led by our clients.”

This collaboration with bp ventures is part of CDPQ’s Innovation in Stewardship Investing (ISI) platform, created in 2020 to seize opportunities related to the transition toward a low-carbon economy and to develop expertise in areas related to the sustainable economy. The ISI platform already comprises partnerships with S2G Ventures and Energize Ventures and is aligned with CDPQ’s new climate strategy and commitment to achieving a 60% reduction in the carbon intensity of the total portfolio by 2030.

Lastly, the fourth deal I wanted to bring to your attention is CDPQ invests in QIMA, a leading provider of supply chain compliance solutions:

Caisse de dépôt et placement du Québec (CDPQ), a global investment group, today announced the acquisition of a significant minority interest in QIMA, a leading provider of supply chain compliance solutions, alongside QIMA’s founder and management. This investment will allow the company to continue driving its strategic growth plan focused on both acquisitions and the expansion of its service offerings into new geographies and sectors. The transaction is subject to customary regulatory approvals.

Founded in 2005, QIMA is a fast-growing global Testing, Inspection and Certification (TIC) company and a digital pioneer in the sector that has invested heavily in developing an industry-leading technology platform. The company is active in the food, consumer goods and life sciences markets with over 15,000 clients in over 120 countries. QIMA has a broad global presence with more than 4,000 employees in 88 countries, as well as offices and specialized laboratories located around the world. The company has further developed a differentiated value proposition through its own supply chain quality management SaaS platform, QIMAone, which facilitates transparency and collaboration by enabling customers to have real time visibility of their entire procurement ecosystem and a shared view of quality and compliance performance.

“We are thrilled to welcome CDPQ and begin a new chapter in the development of QIMA,” said Sebastien Breteau, founder and CEO at QIMA. “As consumers’ expectations surrounding quality, safety, and environmental impact continue to rise, widespread disruptions are simultaneously making global supply chain management more complex than ever. With the support of CDPQ, QIMA is in a unique position to help. By combining an industry-leading technology platform with our global experts’ presence on the ground, we’ll continue to bring more transparency and traceability to the products consumers are using every day.”

“QIMA has enjoyed significant growth thanks to its superior level of digitalization and ability to successfully integrate numerous acquisitions over the last few years while also continuing to serve a growing base of blue-chip clients,” said Martin Laguerre, Executive Vice-President and Head of Private Equity and Capital Solutions at CDPQ. “With this investment, we look forward to partnering with QIMA and its strong management team as they continue to support a broad range of clients across the world with fast, accurate and transparent data that is essential to ensuring quality products that improve consumer safety and confidence.”

“We are delighted to partner with QIMA and to support the company in its next phase of growth,” said Albrecht von Alvensleben, Managing Director and Head of Private Equity Europe at CDPQ London. “QIMA’s entrepreneurial, customer-centric culture, combined with its proven ability to continuously reinvent itself, are perfectly aligned with CDPQ's ambition to create sustainable, long-term value.”

Linklaters LLP served as legal counsel, BCG as commercial advisor, and PwC as finance and tax advisor to CDPQ. SVZ served as legal counsel, EY-Parthenon as commercial and IT advisor, Accuracy as finance advisor, and DLA Piper as tax and legal advisor to QIMA. Oloryn Partners served as advisor to QIMA’s management.

ABOUT QIMA

At QIMA we are on a mission to offer our clients smart solutions to make products consumers can trust. We combine on-the-ground experts for quality inspections, supplier audits, certification, and lab testing, with a digital platform that brings accuracy, visibility and intelligence for quality and compliance data. We operate in 88 countries and help more than 15,000 global brands, retailers, manufacturers, and food growers achieve quality excellence. Our 4,000 committed employees live and make decisions everyday by the set of our core values: have a look and learn more about the QIMA way.

These are all great deals, investing in tomorrow's innovators.

It's worth noting that investments in these innovative companies are being made through CDPQ's Private Equity team headed Martin Laguerre or by their Innovation in Stewardship Investing (ISI) platform which is co-led by Geneviève Bouthillier and Christian Grimm.

While all these deals are great, it's the co-investment with bp ventures in BTR Energy that caught my attention because we are in the midst of a massive energy transition. 

BTR Energy will use the proceeds from the investment to scale its existing operations and expand into new markets, including emerging clean fuels markets in Canada, the United Kingdom and Europe

In the press release, Geneviève Bouthillier, Managing Director, Private Mid-Market Companies and Stewardship Investing at CDPQ states: “Our co-investment in BTR Energy is a good example of what we aim to do with bp ventures: invest in promising companies that have demonstrated their capability to have a concrete impact, in order to propel their growth.”

I also like what Nacho Gimenez, Managing partner at bp ventures, states: “BTR Energy is exactly the type of game-changing business we look to invest in at bp ventures. They identified a value chain that could increase the clean electricity used in EV charging, developed an innovative solution to make it work and successfully deployed it."

The first CDPQ-bp ventures co-investment, which included additional co-investors Clean Energy Fuels, Innovatus Capital Partners, and SineWave Ventures, will support BTR Energy in growing its platform to help support the decarbonisation of the transportation sector by using data to enable interactions between electric vehicles and electricity markets. Today, BTR Energy’s “Bridge” platform automates participation in low carbon fuels programs, like California’s Low Carbon Fuel Standard, by connecting leading EV manufacturers, fleet operators, and charging station networks to renewable electricity generators. BTR Energy will use the proceeds from the investment to scale its existing operations and expand into new markets, including emerging clean fuels markets in Canada, the United Kingdom and Europe.

Anyway, this is an exciting time to invest in innovative companies that will (hopefully) grow by leaps and bounds over the next decade, playing on many secular themes, decarbonisation being the key one. 

All of Canada's large pensions are investing heavily in tomorrow's innovators and disruptors but today I covered CDPQ's year-end innovation blitz. 

In my humble opinion, Canada's large pensions should have an innovation section in their annual report going over all these deals as they are exciting and worth tracking. 

Lastly, let me give a shout-out to Kim Thomassin, Executive Vice-President and Head of Investments in Québec and Stewardship, for the extraordinary work she and her team and their partners have done to support Quebec-based businesses over the past year:


Of course, CDPQ's CEO Charles Emond deserves a lot of credit too but he prefers giving credit to others, which is what all good leaders do.

By the way, my interesting read of the day, how the US military plans to make food out of thin air:

Innovation is going on all the time, you're either investing in it or you risk being left behind!!

Below, CDPQ’s Innovation in Stewardship Investing (ISI) platform was created in 2020 to seize opportunities related to the transition toward a low-carbon economy and to develop expertise in areas related to the sustainable economy, explain the two co-leads of this initiative, Geneviève Bouthillier and Christian Grimm in this video (English subtitles). 

As I've stated before, CDPQ is a global leader when it comes to responsible investing and it rightly wants to be perceived as a trendsetter, not a follower. I'm very confident this ISI platform will grow exponentially over the next decade, investing and co-investing in innovative companies that are part of the energy transition and more. 

Second, Daniel Saks, Co-CEO of AppDirect, reveals everything they’ve learned about digital heroes. I don't have access to the full podcast but listen carefully to what he states here, he's spot on.

Lastly, Stephanie Hughes, finance reporter at the Financial Post, discusses Canada's oligopoly problem.

Indeed, Canada is a mecca for oligopolies and if you ask me, we need major competition, innovation and disruption in all these industries (don't hold your breath!).

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