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Trulioo CEO Steve Munford.Jesse Winter/The Globe and Mail

One of Canada’s leading private technology companies, Trulioo Information Services Inc., has joined the swelling ranks of domestic digital companies making acquisitions abroad.

The Vancouver company said Tuesday it had bought Danish startup HelloFlow ApS for cash and equity. Trulioo did not disclose the value of the acquisition – the first in its 11-year history – but an industry source said the deal was worth upwards of US$50-million.

The Globe and Mail is withholding the identity of the source as they are not authorized to discuss the matter.

Other flush Canadian tech companies that have gone on a global buying spree in recent months include PointClickCare Technologies, Eddyfi NDT, Dye & Durham DND-T, Lightspeed Commerce LSPD-T, Coveo Solutions CVO-T, SemiosBio Technologies, Clio, FreshBooks, Magnet Forensics MAGT-T, Intelerad Medical Systems and Vendasta Technologies.

Data from Refinitiv show tech companies accounted for more than 21 per cent of foreign acquisitions by Canadian corporations in 2021, the sector’s highest share since 2000.

“If you go back 20 years it was all U.S. companies buying Canadian” enterprises, said Trulioo chief executive officer Steve Munford. “This is a sign of the maturity of the market. We’re the ones who are acquiring.”

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Trulioo provides online identity verification services for more than 400 customers globally, including financial services giants, payments processors, online marketplaces and cryptocurrency exchanges. It has the capacity to confirm the identities of five billion consumers and 330 million companies through its GlobalGateway platform. The digital tool accesses hundreds of data sources online including credit bureaus, government agencies and phone companies to confirm the identities of customers or voters and expose money launderers. Trulioo is then able to verify identities within minutes.

With HelloFlow, Trulioo is picking up a two-year-old company with fewer than 30 employees that has developed a drag-and-drop tool that simplifies the ability to build client onboarding, monitoring and digital workflow technology. By embedding that technology into its own, Trulioo will be able to speed up its own product development by 12 to 18 months, making its platform easier and faster for its corporate customers to set up and install.

“Everybody wants to establish trust but that also needs to be done in a way that is as seamless as possible and not interfering with whatever transaction or interaction people are trying to accomplish,” said Trulioo board member Andrew Lugsdin. “We think this is an important piece of technology that helps us reach our vision.”

Trulioo is in an enviable position relative to other emerging technology companies, particularly at a time when valuations for technology companies are under pressure: It is doubling sales every year and now generates US$100-million in annual revenue. It has just 320 employees and is “very profitable,” Mr. Munford said.

The company rarely loses a customer and has been able to keep customer acquisition costs lower than those of other software companies. Revenues from existing customers are growing on average by more than 50 per cent a year, giving the company an enviable “net revenue retention” rate of 150 per cent-plus.

Trulioo’s strong performance enabled the company to raise one of the largest financings by a private Canadian technology enterprise last year. The company announced a US$394-million financing last June led by top Silicon Valley investor TCV and backed by existing investors Blumberg Capital, Mouro Capital and the venture-capital arms of Citigroup Inc. and American Express.

The financing, of which US$150-million went to the company and the balance to existing investors, valued the enterprise at US$1.75-billion. Other Trulioo investors include Goldman Sachs Group, Banco Santander and Business Development Bank of Canada.

Mr. Munford said the proceeds from the financing enabled the company to make acquisitions, and said any subsequent deals would be similar to the HelloFlow transaction by targeting companies that could help it advance its product development.

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