QUICK TAKE

Not since 1Password and Wealthsimple have we discussed a round of this magnitude, but we now have a brand new deal to add to the list.

Today, we’re weighing in on the largest Canadian software venture round ever, and just how it all came together.

What is the news?

Clio Raises $900 Million in Historic Round for Canadian Software Venture

Vancouver-based Clio has made headlines by securing a USD 900 million funding round at a $3 billion pre-money valuation, marking the largest single round raised by a Canadian software company. This investment was led by NEA, with participation from Goldman Sachs Asset Management, Six Street Growth, CapitalG, and Tidemark.

Let’s highlight some of the key takeaways:

Historic Milestone:

Clio's $900 million USD funding round is the largest ever for a Canadian software company, surpassing previous records set by companies like 1Password and Wealthsimple.

New Investors:

The round was led by NEA and included other high-profile investors such as Goldman Sachs, Six Street Growth, CapitalG (associated with Google), and Tidemark, all of which are new to Clio.

Secondary Shares:

A significant portion of the round was allocated to secondary shares, providing liquidity for existing investors, employees, and founders, which helps them realize returns and reduce financial stress.

Strong Financials:

Clio boasts over $200 million in annual recurring revenue (ARR) and has maintained profitability, making it an attractive investment.

Strategic Growth:

The company's growth strategy includes expanding its product offerings, such as a recently launched bookkeeping and accounting suite tailored for legal professionals.

Market Impact:

Clio serves over 150,000 lawyers and employs around 1,100 people. The company has made four acquisitions to bolster its offerings and market presence.

Long-Term Vision:

Founded 16 years ago, Clio exemplifies the importance of patience and long-term growth in building a successful business. The initial valuation of Clio was a mere $1.5 million, showcasing the exponential growth and value creation over time.

Employee Rewards:

Providing liquidity to employees through secondary shares can enhance motivation and loyalty, particularly in high-cost living areas like Vancouver. This approach benefits not only the employees but also the company and the broader ecosystem.

Public Market Potential:

The involvement of late-stage investors with experience in taking companies public indicates that Clio may be preparing for an eventual IPO, with these investors providing strategic guidance and long-term support.

Some final thoughts

Clio's historic funding round highlights its remarkable growth and the strong investor confidence in its future.

This achievement underscores the importance of strategic, long-term planning and the value of rewarding employees to foster a successful and sustainable business ecosystem.

Remember. We share our opinions and perspectives from research and conversations we’ve had amongst ourselves and other professionals across the sector. Feel free to share your own — we encourage it, especially if you disagree.

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