The needs of senior executives in marketing and sales roles are driving investments of more than $1.02 billion in software-as-a-service startups across Canada, according to a study conducted by B2B accelerator L-Spark.
“State of SaaS 2017” will be formally presented as part of SaaS North, the second annual event of its kind organized by L-Spark that will bring together startups, customers and venture capitalists in Ottawa on Wednesday.
In a preview of the findings that were made available to B2B News Network prior to its official release, L-Spark noted SaaS products related to marketing and sales activities received the largest proportion of investment deals, following by deals focused more broadly on artificial intelligence and financial services, or fintech.
The report highlights notable signs of growth in “SaaS North” over the past year. This included the IPO of mortgage and lending software firm Real Matters in May, along with substantial funds raised by firms such as robo-advisor Wealthsimple, retail software firm Tulip, on-demand workspace service breather, cloud accounting firm FreshBooks and several others.
“This year, AI, machine learning, chatbots and cybersecurity were the definitive buzzwords,” L-Spark said in a statement, “but the industry that rose above the rest in the SaaS space, in terms of number of deals closed, was the marketing and sales vertical.”
While SaaS investments are on the rise in Canada, they remain dwarfed by the U.S. According to the most recent “Money Tree” report, which tracks VC investment by consulting firm PwC and MatterMark, deals involving AI startups alone surpassed $1 billion in the third quarter of this year. (The Money Tree report doesn’t distinguish SaaS, however, but refers to “Internet” firms, and may include more consumer-oriented entities.)
L-Spark, which has launched dozens of SaaS startups since 2015, compiled the report with help from the Canadian Venture Capital and Private Equity Association (CVCA).