The total investment in the Canadian SaaS startup sector in 2019 was $5.13 billion, which was up by 200% from 2018. This rapid growth meant 2020 was primed to be a massive year for the sector, though the global pandemic threw a wrench in those plans.
While the economic downturn has wreaked havoc across many industries, most notably restaurants, travel and hospitality, the SaaS sector has been resilient— with Canadian companies leading the way.
As rapidly as the world has changed, most people have been forced to adapt just as quickly. Ultimately, SaaS went from being a luxury to a necessity within weeks, causing a boom in the market.
Just this month, Canadian firm Tehama raised $10 million in a Series A funding round. The Ontario-based company provides a cloud-based platform that delivers virtual offices, rooms, and desktops anywhere in the world, on any desktop or browser in minutes. It requires no infrastructure installations and no networks to retool. It’s no wonder that Ontario has been dubbed the ‘Silicon Valley of the North.’
Canada's newest unicorn, edtech startup ApplyBoard also raised an impressive round of $75 million bringing its total valuation to $1.4 billion. The SaaS-enabled recruitment platform is aimed at assisting international students gain greater access to higher education.
Meanwhile, restaurant-based SaaS startups and hospitality firms are feeling the heat. Toronto-based company, Ritual which allows customers to order food through its app and pick up the food without waiting in line, laid off more than half of its workforce as it also plans to reduce its operations in the face of the pandemic.
Hopper, a travel booking app headquartered in Montreal, also made layoffs as the airline industry comes to a halt.
Healthcare is currently a top priority and with many clinics turning away walk-in clients, telemedicine has experienced a surge in clients.
CloudMD, a company focused on digitizing the delivery of healthcare, expanded its direct-to-consumer telemedicine app this year in response to COVID-19. Doctors who have signed up with CloudMD can work remotely from home allowing for rapid scale-up potential.
After a patient has an appointment, CloudMD bills the government directly just like every onsite clinic does in Canada. The company records 100% of the revenue and keeps 30%, 10% more than onsite clinics receive. Meanwhile, the doctor receives 70%. This model makes CloudMD more profitable than traditional health care stocks.
While SaaS companies innovate and adapt, the truth is the landscape is being changed forever. And it’s no secret that Canada is catching up to the US, the global leader in SaaS.