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Archive for the ‘Quick Insights’ Category


The Future of Canadian Fintech

Written on June 3rd, 2016

Written by:

Difference Capital Fintech Team
Tom Liston, CFA, Managing Partner – tliston@nulldifferencecapital.com
Jordan Udaskin, Vice President – judaskin@nulldifferencecapital.com

At Difference Capital we’re proud to have been one of the first Canadian funds with a focus on the Fintech sector.  We invested before Apple Pay and “Tap and Pay” became household terms and have strong relationships with most of our homegrown tech leaders and innovators. Today our Fintech investments represent a material portion of our portfolio.

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Shipping-as-a-Service

Written on April 29th, 2015

Sorry, we couldn’t help but pile on to the “…as-a-service” theme

April 2015

To download a PDF version, please click on the following link:
Shipping-as-a-Service

With barbecue season fast approaching, we felt compelled to splurge on a special new cutting board worthy of our masterful steak.  Reminded of its recent IPO, we start browsing on Etsy and found the most wonderful Heisenberg cutting board.  For the non-Breaking Bad fans, we offer our sympathies.  Salivating at the prospect of cutting meat on our new board, we hit the checkout button and to our horror, the shipping costs come in at $44.06, which is more than the actual cutting board.  How can this be?  Everything is supposed to be instantaneous in the digital age.  Where are those fancy drones that Amazon has been working on?  After recovering from our post Heisenberg cutting board depression, we started doing some digging on how shipping and fulfillment actually works in the world of eCommerce.  Fortunately, we found some intriguing new tech startups that have the potential to really disrupt today’s shipping and logistics infrastructure.  Dare we call them “Shipping-as-a-Service” pioneers.

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Tech Companies Fueling a Nation of Entrepreneurs

Written on December 1st, 2014

A couple of multi-billion dollar start-ups got us thinking.  What’s the common thread between Uber and Airbnb?  They don’t sell stuff to people.  Rather they help people sell their own stuff.  In the case of Uber, they help people sell their driving services.  With Airbnb, it’s accommodations that are sold.  Just a coincidence or something bigger at work?  Then we noticed a few more very successful newcomers that fit this theme – Lending Club, Shopify and Square, among others.  Lending Club helps people make a profit by directly lending to other people.  Shopify and Square help people sell their goods through e-commerce and transaction engines.

Some have termed this the sharing economy or peer-to-peer sharing.  We prefer to look at the theme a bit differently.  There are companies that facilitate sharing such as carpools (Live Rides) or even wifi signals (Fon).  We don’t necessarily include these categories in our definition because the emphasis is on sharing rather than selling.  There are other companies like Shopify that don’t necessarily fit into the “sharing economy” because they sell their software to merchants in somewhat traditional fashion.  Why we include them under our definition is because their tool enables anyone to build an online store and sell things.

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Queen Mary’s Always Insightful Views

Written on June 26th, 2014

Queen Mary’s Always Insightful Views

A few weeks ago, Mary Meeker from Kleiner Perkins published her annual “Internet Trends” slide deck. It’s been a must read for all tech investors for years. However it is 164 slides long this year. So we picked the top 10 sets of slides that resonated most with what we are doing at Difference. If you want the full monty you can find it at: http://www.kpcb.com/internet-trends

Let’s start with some fundamental growth. The next three charts show the three pillars of tech growth (i.e. computing, storage and bandwidth) remain deflationary commodities. Note that these are logarithmic charts! This means that new applications that seemed too expensive or slow are soon cheap and fast. We like ‘em cheap and fast! (Apps that is). For example, years ago Netflix would have been viewed as too much of a bandwidth and storage hog. Now it has over 40 million users.

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Funding World Class Venture Companies

Written on March 10th, 2014

What does it take to build world class venture backed growth companies? $75 to $100 million on average by one measure. A recent study by CB insights highlights that the average amount raised by about 600 private tech companies in the pre-IPO stage (valuations over $100 million) to be over $100 million.

World Class venture companies in our view are those that have the near term potential to have a billion dollar valuation, over $100 million in sales, have rocket-ship growth, kickass margins and big competitive advantages. These are not companies that will RTO into some promoted shell on the TSXV, but do a $50+ million cross border NASDAQ/TSX offering or be bought by one of the 10 tech giants for some eye-popping valuation.

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What we are doing with $100 million

Written on January 27th, 2014

We held our first-ever Investor day last week and even the most optimistic of us “DCFers” were surprised at the turnout and reception we got from Bay street. We “maxed the fire code” (club speak for “at room capacity”) with upwards of 100 investors, analysts and bankers in attendance. The purpose of the day (morning actually) was to show what we’ve been doing with the $100 million we raised last summer plus the $85 million raised before that.

There are infinite ways one could invest a $185 million portfolio, and we believe we’ve stayed true to the core strategy we’ve always communicated. The majority of the portfolio is deployed towards exciting later stage “pre-public” private technology, media and healthcare companies.

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DCF Portfolio Company BuildDirect Raises $30 Million Led By Mohr Davidow Ventures

Written on January 21st, 2014

Huge news this morning from one of the recent additions to our portfolio: BuildDirect announced that it has raised $30 million, led by Menlo Park-based Mohr Davidow Ventures. Recall we made a $5 million investment (Click Here for DCF Press Release) in November of this past year. It’s obviously validating to see such a large raise so soon after our investment.

By our count, this makes BuildDirect the third-largest (behind HootSuite and Shopify) Canadian private technology financing (excl. cleantech) of the past year. This hasn’t gone unnoticed by the media – within a few hours of the release numerous sites including the Globe and Mail, the Wall Street Journal and Forbes ran articles highlighting the raise (Click Here for Forbes Article)

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Difference Capital’s Two Most Recent Investments, Vena Solutions and BuildDirect, Recognized With Awards

Written on November 11th, 2013

We just closed on our investment in Vena Solutions (Announced this past Tuesday; See Release) and the company is already making us look smart – on Thursday night the company received the People’s Choice Award, the “fan favourite standout innovative solution of the year”, at PwC’s Vision to Reality Awards. Competition was stiff, including impressive growth companies such as: Bionym, Frank and Oak, Global Relay Communications, Method Integration and Thalmic Labs. CEO Don Mal, CTO George Papayiannis, and President Rishi Grover were on hand to open the TSX Exchange the following morning.

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Start-up Nation, eh?

Written on October 23rd, 2013

Is it just me or has Canada gone gaga over start-ups? I recently attended a couple of events for tech start-ups.

One was in Toronto and sponsored by the C100 organization (www.thec100.org)– a group founded by some ultra-successful Canuck tech entrepreneurs with deep connections to Silicon Valley, that want to help foster the next generation of tech superstars here in the great white north. How popular was the event? Well put it this way – it filled the former Maple Leaf Gardens!

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Tweet This – The upcoming Twitter IPO is more important than Facebook’s

Written on September 18th, 2013

If the Twitter IPO gets done and gets done successfully, it will signal a full-on late-nineties style tech bull market. Kiddie up! Yes Facebook, LinkedIn and others were key to firing up the long dormant Tech IPO machine, but Facebook’s raunchy debut left tech investors smarting for a full year and only now are they starting to smile again – see the chart below.

But now that no one is losing money on Facebook, and other smaller tech IPOs have generally been successful and investors generally have nowhere else to go with their risk capital, (Resources? – no, Energy? – not really, Emerging markets? – yuk, Bonds? – double yuk, etc.) the Tech IPO machine could really kick into high gear and Twitter could be a great measure of this.

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