A Canadian full service digital consultancy, which has a significant operation in Reading, has received £9.3 million in equity financing from a joint partnership between the Canadian Business Growth Fund(CBGF) and the UK’s BGF. The investment will allow Appnovation to accelerate its international growth and expansion strategy, spurring jobs and economic growth in Canada, the UK and beyond.
Both Appnovation and BGF have significant operations in Reading which will allow for on-the-ground support and close collaboration between the two organizations.
BGF said this deal with Canada is the first of its kind, but its investment is specifically to support the expansion of Appnovation’s UK operations, growing their team in the UK and creating jobs in the region.
With Canadian offices in Vancouver, Quebec and New Brunswick, and 14 offices across the Americas, Europe and Asia-Pacific, the investment will provide Appnovation with growth capital and the ability to strengthen the company’s balance sheet as it scales up internationally.
“We’re thrilled to have the support of CBGF and BGF as long-term minority investors that share our vision for thinking big and planning for ambitious growth,” said Arnold Leung, Founder and CEO of Appnovation.“That partnership and our recent rebrand launchwill allow us to quickly scale both our network and presence throughout the UK and globally.”
Both the CBGF and BGF were created by financial institutions in their respective countries to address the significant growth capital gap faced by mid-market companies. By providing patient, minority capital through an evergreen fund structure and adding value through strategic counsel, both organizations play a critical role in ensuring high potential businesses in their markets can access the growth capital and relationships needed to reach their full potential.
“Appnovation is building an impressive business by executing a differentiated international growth strategy, and we are excited to partner with their leadership team as they evolve into a leading global digital consultancy,” said George Rossolatos, CEO, Canadian Business Growth Fund.“The opportunity for both the CBGF and BGF to further our independent mandates together by driving job creation in each of our respective markets with this joint investment in Appnovation is very exciting.”
Stephen Welton, CEO of BGF, said:“This first co-investment marks the deepening of the relationship between BGF and CBGF, backing the growth ambitions of Appnovation both in the UK and Canada.
“We have been delighted to support CBGF since its inception and are proud to have seen the BGF model effectively deployed on an international level. The relationships we have will help to build opportunities and networks for our portfolio and the CBGF’s. We’re very keen to see the BGF model adopted in other countries, creating a positive and pragmatic network for growth businesses across the globe. Increasingly, entrepreneurs and high growth companies need effective strategies to expand internationally. This investment highlights how long-term patient capital can really accelerate that.”
Appnovation has been recognized with multiple awards for excellence and achievement, including receiving a 2019 Deloitte Technology Fast 500 award, and a 2018 Canadian Business Growth 500 Fastest Growing Companies award, among others.
BGF was set up in 2011 and has invested more than £2bn in over 285 companies, making it the most active investor in the UK and globally by number of transactions.
BGF has £2.5bn to invest in UK SMEs and in Ireland, and an additional €250m to support Irish businesses. In 2018, Canada launched its equivalent – the Canadian Business Growth Fund – based on BGF’s funding model, and Australia is now actively exploring the approach as well.
BGF is a minority, non-controlling equity partner with a patient outlook on investments, based on shared long-term goals with the management teams it backs.