Martin Basiri came to Canada from Iran in 2010 to study engineering at University of Waterloo, then started a company with his two brothers to streamline the process for foreign students to apply to universities abroad after seeing how complicated the process could be.
That company, ApplyBoard Inc., became one of the hottest and most highly valued startups from the Kitchener-Waterloo region since BlackBerry Ltd. BB-T, but for the 35-year-old Mr. Basiri, it was just a warm-up. On Tuesday he will take the wraps off his newest startup, Passage Inc., revealing at the Collision technology conference in Toronto that he has raised $40-million led by ApplyBoard backer Drive Capital.
While ApplyBoard helped foreign students of means get into Western schools, Mr. Basiri’s goal with Passage is to open the same opportunity to everyone else in developing countries with brains and talent but who lack financial resources.
“Talent is evenly distributed around the world. Opportunities are not,” Mr. Basiri said in an interview, adding he could only afford to study in Canada because he got a scholarship.
His plan is to find bright students in developing countries who want to work in science, technology, engineering and mathematics (STEM) fields or other short-staffed areas such as health care, but who can’t afford to migrate. They would be directed to a “super app” Passage is building that would help them apply digitally to study or work in Canada – but also connect them with lenders or grantors who would fund their journey. He’s putting his own money into a pilot program to help bring 100 women from Afghanistan to pursue STEM studies here.
Mr. Basiri figures he can solve a few problems at once: bring opportunities to bright people to vastly increase their earning potential abroad; provide a pipeline of skilled newcomers to help the government meet immigration targets; fill pervasive talent shortages; and drive economic growth.
Mr. Baisiri, an entrepreneur since he was a schoolboy, co-founded ApplyBoard in 2015 and led the company as it became one of Canada’s fastest growing startups, raised hundreds of millions of dollars in venture capital, and then achieved a valuation of US$3.2-billion in a financing led by Ontario Teachers’ Pension Plan in 2021 at the height of the pandemic tech bubble. But he was itching to provide even more accessibility to talent from the developing world than ApplyBoard could deliver.
He stepped down as ApplyBoard chief executive officer last August (he was replaced by his younger brother Meti) and incorporated Passage in February, weeks after officially leaving ApplyBoard. He began talking first to ApplyBoard investors, and found the idea for Passage had instant appeal. Mr. Basiri had a tentative deal by March.
Veteran Bay Street investor John Ruffolo, who has invested personally in Passage, said in an interview: “This is about how to attract the best immigrants to your country that might not be from the wealthiest 1 per cent.” Unlocking a path for more skilled immigrants to come would be “a great policy move for Canada,” he said.
Drive partner Nick Solaro, whose Columbus, Ohio-based fund has backed several education technology startups, said in a statement that he was making “an investment in Canada’s future” by backing Passage to address “a socio-economic crisis” as thousands of jobs go unfilled. “Passage will serve the best talent in the world – while also serving Canada.”
Passage has cash and ambition but fewer than 10 employees, a digital platform under construction, a nascent strategy and a yet-to-be-determined revenue generation plan. “That’s not my first concern,” Mr. Basiri said. “My first concern is to create the flywheel. My experience is that when you solve a big problem, money follows.”
Targeting prospective immigrants and building software sound like the easiest tasks. What will be more challenging – really Passage’s key early challenge – is finding financial partners to fund foreign applicants. “Securing money is the hardest part of the problem” and the top item investors have grilled him about, Mr. Basiri said.
To succeed, he will need to convince financial institutions to fund new Canadians before they arrive, based not only upon their credit profile at home but future earning potential here. How will he create that confidence in lenders? “Data, data, data,” Mr. Basiri said in an upbeat tone, explaining that through data analytics Passage would identify the best students with promising earning potential.
Mr. Basiri says he’s talked to “everyone” in Canadian financial services including the big banks plus 10 charities, but wouldn’t elaborate. An executive with one Big Five bank confirmed Mr. Basiri has explored opportunities to work with his institution but stressed discussions were preliminary. The Globe and Mail is not identifying the executive as he is not authorized to discuss the matter.
But it is an area that has the banks’ attention. They recognize many future clients will be immigrants, and have built programs to target them, such as Canadian Imperial Bank of Commerce’s no-monthly-fee “smart account for newcomers.” Royal Bank of Canada has partnered with India’s ICICI Bank to court Indian migrants to Canada. On Monday, U.S. startup Nova Credit said it would offer cross-border credit bureau services to immigrants to Canada to help access their credit data from home, making it easier to open accounts.
Despite that flurry of immigrant-focused offerings, Mr. Basiri said Passage will address “a distinct gap, providing assistance to individuals who have just begun on their path to Canada but not yet arrived. We are effectively opening up this opportunity to those who’ve never had it.”