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Venture capital looks to Canada this year, says Mohr Davidow Ventures General Partner Katherine Barr

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February 3
9:47 AM 2014

Venture capitalists often overlook Canada as a key market for technology investment opportunities. However, Mohr Davidow Ventures General Partner Katherine Barr wrote in a guest post at VentureBeat that Canada is now a key market to look out for as important changes have been made in its technology and regulatory ecosystems in the past five years. There is a new era of innovation taking place in the country which has supported the growth of standout firms like HootSuite, Kik and Indochino.

Barr wrote that venture investors are attracted to Canada because the technology startups there hold sustainable business models that have real revenue and concentrate on finding solutions to big, although sometimes "unsexy" issues.

Canadian-founded firms have made material exits in the past few years. Barr cites various examples, such as the $871 million exit of Eloqua to Oracle, Taleo to Oracle for $1.9 billion and Radian6 to Salesforce.com for a price tag of $326 million.

The country also hosts rapidly-growing Software-as-a-Service firms, Barr writes. These include Y Combinator graduate Vidyard and FreshBooks. E-commerce firms like Kobo which was bought for $315 million by Rakuten, Beyond the Rack and Frank & Oak are also players in the market. Meanwhile, the education market is being disrupted by Desire2Learn and TopHat while new technology platforms and distribution systems are being formed by such firms as Shopify, BuildDirect and Tulip Retail that disrupt the retail infrastructure.

Barr also believes that the Canadian tech ecosystem is going to be further enriched by a new batch of experienced technology executives and junior engineering talents that will be released by the recent decline of BlackBerry. "The fall of this one giant will plant the seeds for hundreds of others to grow," Barr wrote.

American technology firms are also putting up offices in Canada to capitalize on its rich engineering talent, reduced operating costs and growing entrepreneurial ecosystem, Barr said.

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