Cluep, a Canadian startup that raised just $500K, acquired for $40M
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Re: Cluep, a Canadian startup that raised just $500K, acquired for $40M
#2Can anyone shed some light on that revenue multiplier? Seems pretty low for a growing company.
Re: Cluep, a Canadian startup that raised just $500K, acquired for $40M
#3Can anyone shed some light on that revenue multiplier? Seems pretty low for a growing company.
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Re: Cluep, a Canadian startup that raised just $500K, acquired for $40M
#4After reading the revenue figures, the sale is a lot less outrageous than the title makes it sound.
Re: Cluep, a Canadian startup that raised just $500K, acquired for $40M
#5My instinct tells me that this is a much better outcome for founders and many employees than “unicorns”.
It’s possibly not as good an outcome for investors, and they might actually view this as a bad exit.
Am I wrong? Would most investors be pretty happy with this? Would most founders/employees be better of going for creating a unicorn?
Re: Cluep, a Canadian startup that raised just $500K, acquired for $40M
#6After reading the revenue figures, the sale is a lot less outrageous than the title makes it sound.
Unless their product is extremely manual and depends on hiring on a bunch of engineers to train models for each customer
Re: Cluep, a Canadian startup that raised just $500K, acquired for $40M
#7My instinct tells me that this is a much better outcome for founders and many employees than “unicorns”. It’s possibly not as good an outcome for investors, and they might actually view this as a bad exit. Am I wrong? Would most investors be pretty happy with this? Would most founders/employees be better of going for creating a unicorn?
Given that Cluep is Canadian, I would expect the $500k they raised to be on a $2M Cap convertible note or some similarly valued instrument. That's totally a guess, btw. They could've sold way more or way less of their company. But, ballparking here.
So, ~20x return over 6 years for investors that are likely non-institutional. In short -- it's probably a very good deal for Angels. That's about a 65% YoY compounded return. It's likely that outside of the founders nobody is going to retire, but that's OK. It's only when deep institutional pockets get involved that <$100M exits are considered "weak."
Re: Cluep, a Canadian startup that raised just $500K, acquired for $40M
#8For context, $500K is a big investment in Canada. Startups here get very little funding. Smart Silicon Valley investors could make bank by investing in Canadian startups for pennies on the dollar.
Re: Cluep, a Canadian startup that raised just $500K, acquired for $40M
#9For context, $500K is a big investment in Canada. Startups here get very little funding. Smart Silicon Valley investors could make bank by investing in Canadian startups for pennies on the dollar.
That could be a start, but this is the wrong mentality.
Investors shouldn't back Canadian startups because they're cheap. That's almost a distinctly Canadian view of investment -- get things cheap, undervalued, or with a low risk profile. (Sorry, Canada, somebody in Canadian VC is going to roll their eyes at me here but it's pretty accurate.)
They should back Canadian or Canadian-led startups because talent is undervalued, and with the right mentorship and a good talent aggregator (an ambitious company that can compete on the world stage), the ROI on product development is going to be through the roof. Don't think about it as getting talent on the cheap, think about it as: if you pay the talent what they're worth, they're going to do 10x the job for you.
Note: there's been a huge uptick in Canadian tech $ recently. Both Microsoft and Uber investing $750M combined in Toronto, announced just this month. People are noticing.
... but that's just my $0.02 :).
Edit: First thing you learn when you talk to sophisticated investors / founders in SV is nobody gives a shit about cheap. Bad investors chase "cheap." What's most important is total magnitude of the opportunity space: who cares what we pay today, how big could this be? Because if the answer is "there's a $3T opportunity here over the next decade" then it doesn't matter if you invest $1M or $10M from a $1B fund -- in fact you'd probably rather invest more to ensure the company you're funding stays capitalized.
You're not going to get top SV VCs dumping $ into Canada because they can make a few bucks on cheap deals. You'll get top SV VCs dumping $ into Canada when the collective Canadian psychology changes from, "we're cheap, invest in Canada" to "we're going to be the most technically sophisticated nation on the planet, and a primary home of the next five major $100B technology companies over the next 30 years."
Canada will get there. Already leading in AI. But not by being "cheap."
Re: Cluep, a Canadian startup that raised just $500K, acquired for $40M
#10Oh boy, another advertising platform, just what the world needs.