Desire2Learn raises $80 mln in venture funding
TORONTO, Sept 4
TORONTO, Sept 4 (Reuters) - Desire2Learn Inc, one of Canada's fastest-growing technology firms, said on Tuesday it has secured $80 million in venture funding that will be used to help strengthen its infrastructure and boost its growth prospects.
The privately held company, a leading developer of online learning systems, is based in Ontario's Kitchener-Waterloo area, just minutes away from the home of BlackBerry maker Research In Motion.
Desire2Learn said the backing comes from U.S. venture capital firm New Enterprise Associates and OMERS Ventures - the venture capital arm of Ontario Municipal Employees Retirement System, one of Canada's largest pension fund managers.
"Our plan is to focus the funds on research and development, as we continue to develop the next generation of our technology and invest in infrastructure," Desire2Learn Chief Executive John Baker said in an interview.
The company builds cloud-based learning systems that provide online learning platforms for a base of more than 700 clients, which include higher education institutes and universities, along with government and corporate sector customers.
The terms of the financing deal were not disclosed, but the deal gives the venture investors a minority interest in the company, Baker said.
The $80 million capital raise is Desire2Learn's first round of financing, and it also marks the largest-ever venture capital investment in a Canadian software company, according to Thomson Reuters data.
"The company has been called on by many private equity and venture groups over the last seven years. We only really decided to go down this path three months ago," Baker said. "We ran a very, very tight process with a very small number of top tier firms. We picked our two preferred partners and we are thrilled with the outcome."
Desire2Learn, which currently has a workforce of around 550 people, has added about 200 people in the past year alone.
Baker said the company had already approved plans to post another 170 jobs even before the financing deal was completed.
"We have built a high-growth profitable organization over the years and we want to continue to see that continuing to grow," said Baker, who declined to disclose details on revenues and growth projections.
The company's rapid expansion comes at a crucial juncture for the area, which has been hurt by RIM's waning fortunes. The one-time Canadian tech behemoth has shed thousands of jobs in recent months as its aging line-up of BlackBerry devices has lost ground to more-advanced devices like Apple Inc's iPhone and a slew of others based on Google's Android software.
The funding from NEA and OMERS Ventures will allow the company to accelerate its global growth plans as an independent entity, said Baker, adding that Desire2Learn has no plans at this time to go public or sell out.
"We are just getting warmed-up. We hope to accelerate the growth in our organization and this is really just the beginning," he said.