* Largest-ever venture capital investment in Canada software
* Tech firm plans to set the stage for growth
* Metrics "unbelievable," fund manager says
TORONTO, Sept 4 Desire2Learn Inc, a Canadian
technology company that develops online learning systems, said
on Tuesday that it secured $80 million in venture funding to
help strengthen its infrastructure and boost its prospects for
The privately held company is based in Ontario's
Kitchener-Waterloo area, near BlackBerry maker Research In
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.
Desire2Learn Chief Executive John Baker said in an interview
that the plan would allow the company to focus on research and
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 were not disclosed, but the deal
gives the venture investors a minority interest, 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
"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
Desire2Learn, which has a workforce of about 550, has added
roughly 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.
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
Howard Gwin, managing director of OMERS Ventures, sees
Desire2Learn as the new shining light in the tech hub that has
grown in and around the cities of Kitchener and Waterloo.
"The metrics on the company are unbelievable. It's rate of
growth with being self-funded is phenomenal -- it is in the top
1 percentile range," said Gwin, adding that Desire2Learn has
barely scraped the surface in terms of both domestic and global
"We love that John has a long-term mindset around building a
great global brand," said Gwin in an interview. "Our view is
this company will become the category leader."
The funding from NEA and OMERS Ventures will allow the
company to accelerate its growth plans as an independent entity,
said Baker, adding that Desire2Learn has no plans at this time
to go public or sell out.