ÍÃ×ÓÏÈÉú´«Ã½

Canada will be home to a new venture capital fund that will invest in enterprise cloud startups. Its backer?Ìý, the global investment arm of Salesforce, a leading cloud-hosted business software provider.

Follow ÍÃ×ÓÏÈÉú´«Ã½ News on &

According toÌý, the $100 million Canada Trailblazer Fund has already taken stakes in four Canadian startups building cloud-based tools for the enterprise, includingÌý,Ìý,Ìý, andÌý.

(Disclosure: Salesforce’s venture arm is an investor in ÍÃ×ÓÏÈÉú´«Ã½ News’s parent, ÍÃ×ÓÏÈÉú´«Ã½. As with all , Salesforce Ventures has zero input in the operation or coverage of the News team.)

The companies mentioned above join a handful of other Canadian enterprise cloud companies in Salesforce’s broader investment portfolio. In the years prior to announcing the new Canada Trailblazer Fund, Salesforce Ventures made investments inÌý,Ìý, andÌý. And Salesforce itself participated in Fredericton, New Brunswick-basedÌýÌýback in 2015.

Almost exactly one year ago, ÍÃ×ÓÏÈÉú´«Ã½ NewsÌýprofiled Salesforce VenturesÌýand a new AI-focused fund it announced at the time. But instead of revisiting the firm and its investments, this time we’re going to take a looking at the state of the market it’s jumping into.Ìý

Investors’ Growing Appetite For Canada’s Cloud Companies

Specifically, using ÍÃ×ÓÏÈÉú´«Ã½ data, we’re going to take a quick peek at Canadian companies in the “enterprise cloud” sector. To do so, we’ve pulled togetherÌýÌýin a wide variety of categories in ÍÃ×ÓÏÈÉú´«Ã½. We used the enterprise applications, enterprise software, SaaS, CRM, sales automation, ERP, billing, meeting software, marketing animation, contact management, and scheduling categories as a rough proxy for the kinds of markets Salesforce’s new fund may be interested in.

And what did we find?Ìý

For one, there’s been a general uptick in venture investment activity in Canadian cloud companies, but that growth has come in fits and starts. Below, you’ll find a chart displaying aggregated annual venture investment data for Canadian cloud companies.

The above chart is based on reported data in ÍÃ×ÓÏÈÉú´«Ã½, which, especially for seed and early-stage rounds, carries some reporting delays. These may not affect dollar volume figures (fledgling companies don’t raise all that much money) but reported deal volumes will undershoot reality for up to two years.

Regardless, between 2012 and 2017, reported venture dollar volume grew by approximately 124 percent.

2018: Off To A Strong Start On The Investment Side

Although it’s not pictured in the chart, so far in 2018 there have been over 20 reported venture funding rounds in Canada for cloud companies in the categories we searched above. Here are some of the highlights so far:

• RFP management provider closed a led by , which *ÍÃ×ÓÏÈÉú´«Ã½ New*s covered as it happened.
• , maker of a web-based suite of collaboration and productivity tools, round led by .
• , a Vancouver-based bookkeeping service provider, , which was led by .
• , which develops and provides a content personalization service platform, led by .
• , a web-based SaaS platform for long-term care providers, led by .

With help of the PointClickCare round, Canada’s enterprise-focused cloud service startups may be on track to raise more capital in 2018 than they did in the prior year.

Where Do Canada’s Cloud Companies Come From?

As for where the hot spots are for Canadian cloud companies, you shouldn’t be surprised that they’re based in the country’s major population centers. Below is a chart showing the distribution of headquarters for our list of cloud companies founded in the past decade.

This being said, it may make sense for Salesforce and other investors interested in Canadian cloud companies to start looking outside these major metro areas. The proportion of cloud companies founded elsewhere in Canada is on the rise. In our dataset, around one fifth of the cloud companies founded in 2008 were located outside the five major metro areas cited above. For companies founded in 2015 and 2017, half are headquartered in other Canadian metro areas.

It goes without saying that there are seemingly endless market niches in the enterprise cloud services market, and as such we just barely scratched the surface here. There are countless data points and anecdotes we »å¾±»å²Ô’t cover here, like this fun fact: , the seemingly ubiquitous workplace chat platform, was originally founded in Vancouver. (It’s since relocated HQ to San Francisco.) Another: , which is based in Ottowa, in the offering, making it one of Canada’s biggest-ever tech IPOs.

In its statement, Salesforce citing IDC research findings, which say that Canada’s public cloud software market will grow six times faster than on-premise deployments, reaching CA$4.1 billion by 2019. No doubt, there will be stiff competition among investors for an increasing number of Canadian companies seeking capital in years to come.

Illustration:Ìý