New $40M equity round for Real Matters sets stage for big things

There aren’t many Canadian entrepreneurs who are trying to build a billion dollar company. Fewer still, I’d argue, who will state that goal publicly. Jason Smith, the CEO of Real Matters, is one of those people. With this morning’s announcement of a new $40 million equity raise, he’s one step closer to reaching his goal.

Real Matters provides data and analytics to 45 of the top 100 lenders in the USA in support of their residential and commercial mortgage portfolios. Its core solution, Solidifi, is a “next-generation appraisal management service” relying upon more than 26,000 independent appraisers. From a standing start a few years ago, Solidifi is now the third-largest independent provider of origination appraisals in the U.S. The company has added the property & casualty insurance assessment markets, thanks to a recent U.S. acquisition.

Real Matters’ market share has doubled in the past two years, which undoubtedly drove some of the demand for the $40 million common share offering. Under Jason’s leadership, Real Matters was named one of Canada’s Best Managed Companies, ranked a Deloitte Technology Fast 50 and Deloitte Fast 500 company (see prior post “Congrats to our Deloitte Fast 50 / Fast 500 winners” Nov. 13-13), and was declared one of the top Canadian ICT and Software and Service Companies on the Branham300 listings. As a portfolio co of Wellington Financial Fund III, we couldn’t be more proud of what the management team and Board have done following our two rounds in 2010 and 2011.

This $40M round drew capital from Canadian institutional investors looking for the next tech IPO candidate, and the successful involvement of BMO Capital Markets and GMP Securities as agents on the financing sets things up well for the next stage of growth in 2014. I wouldn’t be surprised if we are hearing about Real Matters being an IPO candidate a year from now.

We first got to know Mr. Smith via a Wellington Financial Fund I financing for Basis100 in 2002. As a repeat customer of our firm, it’s clear that our venture term debt product dovetails perfectly with fast growing companies that want to manage dilution, without closing the door to major equity financings down the road. Since our $8.5 million raise, Real Matters has added $62 million of capital.

Quite the one-two-three punch. And more big news to come, of that we can be sure.

MRM
(disclosure: our Fund III owns warrants in Real Matters)