Hootsuite Media Inc. has signed a credit financing agreement for up to US$50-million with CIBC Innovation Banking, money that the Vancouver technology firm plans to use mostly for acquisitions.
The company said it plans to use the new money to expand in Asia, Europe and Latin America, as well as focus more on industries such as financial services.
Hootsuite, which has been readying for an initial public offering, hired a new chief financial officer, Greg Twinney, in mid-January. Mr. Twinney said the new capital will help Hootsuite grow more quickly. "This financing is a testament to the strong fundamentals behind Hootsuite," Mr. Twinney said in a statement on Thursday.
The Hootsuite move comes amid growing competition between banks in Canada vying to serve the hot technology sector. The Hootsuite financing marks the first major transaction announced by CIBC's new innovation banking arm, launched after the bank acquired private specialty finance firm Wellington Financial in January. Since then, long-time Bay Street financier and Wellington boss Mark McQueen has become president and executive managing director of CIBC's new unit and has been adding new talent. Most notably, Mr. McQueen last month hired Rob Rosen, a leading Toronto-based technology banker from rival Comerica Inc.
The Hootsuite deal is new business that Mr. McQueen and his team brought in since CIBC Innovation Banking was started, said CIBC spokeswoman Olga Petrycki. Hootsuite CEO Ryan Holmes said in an e-mail that CIBC Innovation offered attractive terms on the credit financing.
Meanwhile, California-based Silicon Valley Bank has received approval from the federal Finance Minister to begin lending in Canada and awaits a green light from Canada's banking regulator before opening the doors on its first branch in Toronto. Barbara Dirks, formerly of Royal Bank of Canada, was recently hired to lead SVB's Canadian operations.
Hootsuite has raised about $250-million in venture capital financing, backed by the likes of OMERS Ventures and Accel Partners. The company last raised money in 2014.
The new credit financing is not linked to a valuation for Hootsuite. There have been questions about the company's valuation and Mr. Holmes has pegged it at more than $1-billion.
Hootsuite makes software that helps companies manage their work on social media. Founded a decade ago, Hootsuite was an early upstart in social media and rose behind the likes of Facebook Inc. and Twitter Inc. Hootsuite in January announced a deal to work more closely with Instagram, the photo-sharing site owned by Facebook.
In January, Mr. Holmes said the company was not in a rush for an IPO.
"The business is in a good position," Mr. Holmes told The Globe and Mail.