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Cherif Habib, co-founder and CEO of Dialogue Technologies Inc., is seen in the company’s office in Montreal, Feb. 12, 2018.Christinne Muschi

Montreal serial entrepreneur Cherif Habib discovered how challenging it was for a startup to break into Canada's health-care market when he was trying to build his last venture, a medical devices company called EMcision International Inc. "We were selling all over the world but very little in Canada. It motivated me to think what technologies existed elsewhere that I could bring here."

The answer, he determined, was telemedicine: offering patients the chance to see doctors and nurses over their smartphones or computers, thus avoiding long waits and time-consuming treks to clinics and hospitals for prescription refills or diagnoses that could be done remotely. It's a more developed market in countries such as Britain and the United States, and telemedicine services are offered by several Canadian provinces, but Mr. Habib saw a big opportunity to market his new company, Dialogue Technologies Inc., to firms that could offer the service as a benefit to their employees.

Now, just 21 months after launching Dialogue with co-founders Anna Chif and Alexis Smirnov, Mr. Habib's company is emerging as another favoured child of Quebec Inc. 2.0 – the part of Montreal's startup-funding ecosystem anchored by Power Financial Corp. On Tuesday, Dialogue will announce it has raised $12-million in a venture capital financing round led by White Star Capital and supported by Germany's HV Hotzbrinck Ventures, Power Financial's venture arm Portag3 Ventures, National Bank of Canada and Walter Financial – less than a year after raising $4-million in seed financing led by Power-affiliated incubator Diagram.

Great-West Life Assurance Co., controlled by Power Financial, has launched a one-year pilot project to offer the service through its employer customers, while insurer SSQ Insurance, majority-owned by Quebec's FTQ Solidarity Fund – one of the top local investors in the Quebec tech sector – is considering doing the same for its two million customers across Canada after testing it out first on its own employees.

"The response was overwhelming," said Daniel Ouellet, SSQ's vice-president of human resources, when it offered the service to its 2,000 employees three weeks ago, and about 200 have already used it. "They all told us the same thing: The service is very impressive, it allows people to save a lot of time because they don't have to go to the hospital and waste a lot of time. … Everybody is extremely impressed with the fast and courteous and professional service they're getting."

Dialogue already has 25,000 end users working for almost 150 employers in Quebec and five other provinces, including Cossette Communications, McKinsey & Co. – a former employer of Mr. Habib and Ms. Chif – Cirque du Soleil and Dentons Canada LLP. It is generating millions of dollars in revenue on an annualized basis. Mr. Habib estimates the company will quadruple in size this year and double both its employee count, to 100, and the number of nurses and doctors it contracts at hourly rates to provide diagnostic services over its secure platform. Dialogue typically charges employers $12 to $15 per employee per month.

"They have found quite an exceptional product-market fit," said Jean-Francois Marcoux, managing partner with White Star. "The product they're offering to employers has been proven to be quite a no-brainer when it comes to the return on investment they get."

Telemedicine has been gradually growing in popularity for the past two decades, with most physicians' colleges endorsing the practice as long as professionals hold to the same standards they would for in-person visits. A 2015 survey by Canada Health Infoway found that about 80 per cent of telemedicine patients in British Columbia found their online appointments to be of similar thoroughness and quality to an in-person visit.

While adoption has been limited by some barriers – including the fact many conditions such as appendicitis can't be properly diagnosed remotely – Mr. Habib said telemedicine offers benefits in those instances where text or video exchanges will suffice, such as for diagnosing routine ailments or renewing prescriptions. "We sell along three pillars of value proposition," said Mr. Habib, including the chance for employers to offer an attractive perk to employees, reduced absenteeism and lower health-related costs.

It's seen as a tradeoff many employees and employers would make: For a relatively minor annual cost, employees can get on-demand online medical visits that replace free but time-consuming and inconvenient trips to their doctors under provincial health care plans. Mr. Habib points out that if a law firm can save just half an hour a year of a lawyer's time away from the office by using Dialogue, "it pays for itself."

The Globe chats with entrepreneurs Ben Zifkin, Sharn Kandola and Ben Zlotnick to get tips on raising venture capital. Produced by Sean Liliani.

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