Siblings Martin and Meti Basiri, who co-founded ApplyBoard along with their brother Massi, pose for a photograph at the University of Waterloo in Ontario on May 23, 2019.Tijana Martin/The Globe and Mail
The school-application company ApplyBoard Inc. is now valued at $2-billion, closing its second round of venture financing in less than a year as it hires by the hundreds even in the midst of the pandemic.
Based in Kitchener, Ont., ApplyBoard has become one of the fastest-growing companies in the Waterloo region’s hotbed tech sector – and all of Canada – as a growing number of international students use its platform to apply to English-speaking universities, colleges and high schools.
The company is now Canada’s first publicly disclosed new pandemic-era “unicorn” – tech-sector parlance for crossing the vaunted billion-dollar valuation threshold. Few startups in Waterloo have announced such a valuation in the years since BlackBerry Ltd. faded from dominance, putting renewed attention on the region’s startups. The messaging app Kik said it reached a $1-billion value in 2015, though the company has since shrunk drastically amid a cryptocurrency dispute with securities regulators.
Founded five years ago by three brothers from Iran who came to the Waterloo region to study, ApplyBoard’s proprietary algorithm finds the right match between students and schools. Its third round of growth financing totals $100-million, and comes after a $55-million raise in May, 2019 and a $17-million round in July, 2018. The company, which has doubled to 400 employees in the past year, plans to keep hiring, explore new markets and deepen its reach in existing markets with the funding.
More than 1,200 schools in North America and Britain use ApplyBoard’s standardized application platform to match their supply – hundreds of thousands of spaces for students – with the demand from millions, the company says. Students can apply for many schools at once; the credentials they list help ApplyBoard’s analytics tool find the best match. Most of its revenue comes from schools who pay to use the platform to bring in students.
Its chief executive, Martin Basiri, believes ApplyBoard has only scratched the surface of its potential. “What we have accomplished so far is less than 1 per cent of the global market” of international student applications, he said. Its next “natural markets” for attracting students include South Asia, South America and Africa, he added. “We’re in the early, early days of helping global student mobility.”
Mr. Basiri, 32, co-founded ApplyBoard with brothers Meti, its chief marketing officer, and Massi, the chief operating officer. The three had come from Shiraz, Iran, filling out endless reams of paperwork in the process.
Helping each other – and others – get through the application process helped provide the spark that launched the business. It was born five years ago at the University of Waterloo’s Velocity entrepreneurship centre.
The new $100-million funding round is led by Drive Capital, with additional funding via Fidelity Investments Canada and the Business Development Bank of Canada, as well as from returning investors such as Anthos Capital, Artiman Ventures and Plug and Play Tech Center.
Drive Capital is based in Columbus, Ohio, and is run by partners who left Silicon Valley to invest in companies that focus on where customers, not venture capitalists and technologists, live. It has a history of investing in education companies including, previously, language-learning app Duolingo Inc. and online-course business Udacity Inc.
Drive partner Nick Solaro cold-called Mr. Basiri after hearing about ApplyBoard, and met him about a year ago. “It is very, very difficult to find a business that can grow at the rate that ApplyBoard is growing while not consuming mountains of cash,” Mr. Solaro said in an interview. He declined to share the company’s cash burn rate.
As the company continues to grow, Mr. Basiri said a public offering is “definitely” an option, but that his company isn’t in a rush for further capital right now thanks to its low burn rate.
Even as the novel coronavirus pandemic has ground global travel to a halt, schools need to recruit students for the new academic year. ApplyBoard is still signing up new institutions, and lobbying the Canadian government to allow international students to begin coursework remotely, lest schools lose out on thousands of students and the revenues they bring.
Prior to the pandemic, Canada was coming off its best year for venture-capital investment in two decades. Nine-figure mega-rounds were granted to companies such as Newfoundland fraud-detection software provider Verafin Inc. and Toronto’s AgileBits Inc., which makes password protector 1Password.
In January, Telus Corp. led a $120-million investment in Kitchener smart-traffic company Miovision Technologies Inc.
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Josh O’Kane