Teachers’ leads $230-million financing of ApplyBoard, valuing Waterloo unicorn at more than US$3-billion

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Ontario Teachers’ Pension Plan has led a US$230-million financing of ApplyBoard Inc., one of the fastest-growing startups to emerge from the Waterloo, Ont., area in years.

Two sources familiar with the as-yet-undisclosed transaction said the pension giant’s Teachers’ Innovation Platform (TIP) unit led the deal with participation from past investor Fidelity Investments Inc. and other backers, valuing ApplyBoard at more than US$3-billion. Talks continue with financiers for an additional investment that could bring the total funding to US$300-million-plus. More than half of the funds will go to ApplyBoard; the rest will go to early investors.

The Globe is not identifying the sources as they are not authorized to speak about the deal. A Teachers’ spokesman declined to comment. A spokesman for ApplyBoard also declined to comment and offered an interview with CEO Martin Basiri, but not until next week.

The deal is the highest-profile Canadian bet by two-year-old TIP, led by Teachers’ veteran Olivia Steedman, which has a mandate to increase the pension giant’s exposure to private technology investments globally. It’s one of the first deals led by Rick Prostko, a San Francisco venture capitalist who joined Teachers’ in January from Comcast Ventures.

Based in Kitchener, Ont., ApplyBoard was founded in 2015 by the Iranian-born Mr. Basiri and his brothers Meti (the company’s chief marketing officer) and Massi (chief operating officer), to improve the process for international students to apply for schools abroad. They were inspired by their own experiences navigating the daunting process of searching for information about and applying to schools overseas. Mr. Basiri and his brothers came to the Waterloo region to study in the early 2010s and launched their company at the University of Waterloo’s Velocity incubator.

“You are completely lost – you have no clue what to study and where to study … [and] getting fragmented information” from many sources, Mr. Basiri said in a 2018 interview with the Waterloo Chronicle. “We decided to see if we could solve this problem and make an impact on other people’s lives.” Their goal was to shrink the months-long process of applying to study in Canada to less than a day.

ApplyBoard offers a proprietary online platform that helps match students with institutions and assists them with each step of the application. Students can apply to multiple schools at once through ApplyBoard’s standardized application. On the company’s website, ApplyBoard says it has helped 150,000-plus students apply to educational institutions worldwide.

It also helps academic institutions, which draw significant revenues from the high tuition paid by international students. ApplyBoard works with 1,500-plus primary, secondary and postsecondary schools across Canada, the U.S., U.K. and Australia and 5,000 different recruitment partners. The company, with close to 800 employees (according to LinkedIn), generates roughly US$100-million in annual revenue, mostly from schools using the service.

Though the pandemic curtailed international travel, ApplyBoard, one of the fastest-growing startups in North America according to Deloitte, still signed up new schools and lobbied the federal government to let international students to do their course work remotely.

ApplyBoard’s next play is to build on its relationships with students by offering an online verification service called ApplyProof. The service is intended to help immigration officials, admissions officers and other stakeholders access and verify documents from international students’ applications.

ApplyBoard in May announced partnerships with U.K. education publishing giant Pearson PLC and American non-profit Educational Testing Service (ETS) that allow students to store and readily access results of their English-language proficiency tests and GRE graduate admissions test provided by the two organizations.

ApplyProof “is a natural extension of what they already do” and could help foreign students more easily apply for other services requiring credential checks, such as bank accounts, insurance and mobile phone services, said Dominique Bélanger, managing partner of BDC Capital’s $300-million Growth Venture Co-Investment Fund, an ApplyBoard investor. “There’s a slew of needs these foreign students have coming here. If you can facilitate that and put that into your ecosystem, you can make life easier for foreign students and derive revenue for referrals.”

Mr. Belanger, who declined to comment on the funding, added ApplyBoard is targeting “a big, complex problem and solving it in a very elegant way.”

Even before the new financing, ApplyBoard was one of Canada’s most heavily funded startups, raising C$242-million through last fall. Most of its past institutional investors are from outside Canada, except BDC and Garage Capital. ApplyBoard reached “unicorn” status last spring when it raised $100-million led by Drive Capital, valuing the company at $2-billion. (Startups that achieve valuations of US$1-billion are known in the sector as unicorns.) Other backers include Anthos Capital, Artiman Ventures, Plug and Play Tech Center, ETS, Index Ventures, Blue Cloud Ventures and Harmonic Growth Partners.

TIP, which oversees a $3.5-billion portfolio, has led eight- and nine-figure investment rounds, including Elon Musk’s Space Exploration Technologies Corp., driverless vehicle developer Pony.AI Inc. and cybersecurity company Tanium Inc. Its previous Canadian deal of note was a US$50-million investment in Calgary’s Attabotics Inc. in 2020, which Mr. Prostko also backed through Comcast.

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