Georgian Partners’ Fund II debuts with lead of Top Hat’s $10 mln Series B

Students Throwing Graduation Hats

Georgian Partners has taken time away from fundraising to lend support to a Canadian ed-tech startup it feels has especially strong growth prospects.

The Toronto-based venture capital firm has led the $10 million Series B financing of Top Hat, a mobile and web-based provider of classroom engagement and teaching tools.

The firm was joined in the round by existing investors Emergence Capital Partners and iNovia Capital, which together led Top Hat’s $8 million Series A in 2012, as well as SoftTech VC, Version One Ventures, Golden Venture Partners and Felicis Ventures.

The deal comes only a few weeks after Georgian Partners wrapped up the initial close of its second fund, Georgian Partners Growth Fund II. It raised $100 million in commitments from a group of limited partners led by newly minted Canadian fund-of-funds Northleaf Venture Catalyst Fund.

In fact, the Top Hat investment is Fund II’s debut investment.

Georgian co-founder and managing partner Justin LaFayette told peHUB Canada that he is excited about partnering with the company and helping accelerate its revolutionary platform.

“The higher education sector is facing huge challenges in terms of student participation,” said LaFayette. Top Hat’s platform is a powerful response to these challenges “because it directly improves student engagement and creates more effective learning outcomes.”

LaFayette also believes the company is well-aligned with Georgian’s investment focus on applied analytics—or opportunities that reflect the convergence of cloud-based computing, big data and information rights.

“The Top Hat story shows the real potential of applied analytics,” he said. More than this, LaFayette is convinced that the startup’s management team is dedicated to realizing this potential. “A lot of companies talk about big data and analytics. Top Hat has shown that it is strategically committed to executing.”

Top Hat was founded in 2009 by CEO Mike Silagadze and CAO Mohsen Shahini, formerly students at the University of Waterloo. Drawing on their own educational experiences, the pair conceived of a proprietary technology that today is being used by more than 300,000 students in more than 400 universities around the world. Along with its Toronto headquarters, the company has opened offices in San Francisco and Chicago.

Top Hat has secured $20 million since its inception from Canadian and U.S. VC funds, as well as several angel investors.

LaFayette said that his firm’s recent success on the fundraising trail has made it possible to take the lead on Top Hat’s Series B round.

“Companies like Top Hat are in a good position to raise substantial amounts of capital in North America’s market ecosystem—and to ultimately succeed in that ecosystem,” he said. “Increasingly, Canadian venture capital funds are a part of that mix. That includes Georgian Partners.”

Georgian was founded in 2008 by a team of tech entrepreneurs and executives. For example, LaFayette was co-founder of enterprise software company DWL, while managing partner Simon Chong was DWL’s head of global sales and marketing. Prior to its acquisition by IBM in 2005, the company was the recipient of significant VC investment, and routinely featured on Deloitte’s “Technology Fast 50.”

“The firm is definitely weighted to people who have operating experience,” said LaFayette.

Over the past six years, LaFayette and his colleagues have quietly built Georgian’s VC brand, investing in a range of North American expansion-stage software, Internet and information companies.

Among its portfolio companies is e-commerce and retail company Shopify, which last December raised a $100 million Series C financing led by OMERS Ventures and Insight Venture Partners with the participation of Georgian and other investors. The firm has also backed 41st Parameter, a fraud detection specialist that was acquired in October by Experian for US$324 million.

Top Hat is Georgian Partners’ 12th investment to date.

Photo courtesy of Shutterstock

 

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