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Unicorn within the patch: Calgary software program firm Benevity achieves a uncommon valuation of 1.1 billion US {dollars} on behalf of a British personal fairness agency

Bryan de Lottinville, CEO of Benevity, on February 22, 2018 at its headquarters in Calgary, Alta.

Todd Korol / The Globe and the Post

A British private equity firm has taken control of Benevity Inc., the darling of Calgary’s thriving tech sector, valued the company at $ 1.1 billion.

Hg Capital LLP has bought stakes from existing shareholders including founder and CEO Bryan de Lottinville and US private capital giants JMI Equity and General Atlantic. Mr de Lottinville and President Kelly Schmitt appeared dressed as unicorns on Wednesday to announce the deal. Companies that score $ 1 billion in valuation are called “unicorns.”

Benevity makes software that is used by 19 million employees at 650 companies including Nike, Coca-Cola, Apple, and Google to donate money and volunteer hours to charitable causes.

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The deal is the second in recent weeks in cities outside of Canada’s major technology centers, valued at over $ 1 billion. It follows Nasdaq Inc.’s purchase of Verafin of St. John’s for $ 2.75 billion, which provides fraud detection and anti-money laundering software. The Benevity transaction caused a stir among Calgary business and political leaders. They expect the industry to counter the effects of a prolonged downturn in oil and gas.

On Wednesday evening, Mr. de Lottinville told The Globe and Mail: “It is a very positive result for Benevity, our employees and our customers. [This is] Validating the idea of ​​doing good by doing good and increasing the company’s purpose as a thing. “

He confirmed the price on Thursday. “Financial advisors told us that based on a valuation north of $ 1 billion, this is the largest deal ever done in the EU [environmental, social and governance] Space and one of the largest software deals in Canada in the last decade, ”he wrote in a blog post.

The company, with annual sales of roughly $ 100 million, last raised money in October 2019 when JMI and General Atlantic invested $ 40 million in a deal in which the company was valued at nearly $ 400 million. General Atlantic, JMI and Benevity Management will continue to be involved in the deal.

The company offers a “white label” platform that companies use internally to process employee donations to charity, as well as a range of initiatives aimed at improving employee engagement and corporate social responsibility initiatives to meet.

Benvity met with strong global investor interest and received “multiple offers,” wrote de Lottinville.

“Benevity is already a robust, high-growth company with a trusted platform for some of the world’s largest global brands looking to increase their targeted activities. We look forward to working with the team to become even more comprehensive and impactful, ”said Nic Humphries, Hg’s senior partner, in a statement.

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With 650 employees, Benevity is a leader in a Calgary technology industry that grows as city officials seek to diversify the economy. It’s also the youngest company in Calgary to earn a billion dollar valuation. In 2019, US financial services giant Morgan Stanley bought software company Solium Capital for $ 1.1 billion. Earlier this year, RS Energy Group, a data and analytics provider focused on the oil and gas industry, was sold to Genstar Capital for $ 1 billion.

“It’s a pretty big deal, and it sends a message that we desperately want to send to the rest of Canada, but also the world, about this burgeoning tech ecosystem that’s happening here – built on a really strong talent base and one Community that still has that entrepreneurial spirit, ”said Mary Moran, executive director of Calgary Economic Development.

The city has focused on the tech and life sciences sectors to help rebuild an economy suffering from high unemployment and vacancy rates in the inner city. The deal was received with enthusiasm by personalities such as Mayor Naheed Nenshi and Alberta’s Minister for Labor, Economy and Innovation Doug Schweitzer.

Kim Furlong, president of Canada’s Venture Capital and Private Equity Association, said the Benevity deal shows, “It doesn’t matter where you build it. When you have a great idea and an ecosystem to support you, capital will flow and the new way of connecting actually speeds it up. “

The Alberta government recently increased its focus on supporting its technology sector after cutting an initial tax credit program for the industry. For example, Ms. Furling pointed to the appointment of Mr. Schweitzer to his ministry and this year’s recapitalization of Alberta Enterprise Corp. that invests in venture capital funds. But she warned: “You still have a lot to do [in Alberta] and they have to stay the course. This is not a four year affair, this is not a political mandate fulfillment. That takes 12 to 20 years. “

This is the third notable deal for Hg in Canada this year. In January, the company acquired a controlling interest in medical imaging software Intelerad Medical Systems Inc. of Montreal and in October an interest in accounting software company CaseWare International Inc. of Toronto for an undisclosed amount.

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