alarm:clock

News & Updates - Sunday, May 27, 2007

Canada Alert: Top Web 2.0 Wonders

Last year Canucks were singing the blues that there was not much going on Web 2.0-wise in Canada. Successful Canadian Web entrepreneurs were known for their expertise in domaining (people like Frank Schilling, Yun Ye and Kevin Hamm) as well as adware specialists like Integrated Search Technologies.

But the face of Canadian Web ventures is changing rapidly. To be held at the end of this month, the Canadian Web 2.0 conference Mesh has been sold out for weeks. It doesn't hurt that Canadian born Flickr was bought by Yahoo, that Forbes bought Investopedia or that Bubbleshare got a quick $2.25M buyout by Kaboose (TSX: KAB).

The a:c has investigated the Canadian Web market and startups and hereby announce our Ten Canadian Startups Waking Up the Web from alarm:clock, with runners-up. Some of the criteria for our choices: 1) Privately held 2) great founders 3) consistent execution on business plans 3) innovation, and 4) user uptake (based on sources like Comscore, Statbrain, Alexa ranking, and blog buzz).

Helping us with the list is Canadian tech blogger and B5 Media exec Mark Evans who describes the Canadian Web scene like this: "To be honest, the Canadian start-up scene is just starting to gain some momentum. This should not be much of a surprise, however, given Canadians have a troubling habit of waiting on the sidelines until they're sure the waters are warm enough to wade. That said, it's encouraging to see a growing number of start-ups launch, as well as some VCs getting more involved."

Extend media
HQ: Toronto (although it moved and now makes it Boston officially)
Funding: ExtendMedia has raised $12M in Series B from Venrock and TVM, joined by return backer Atlas Venture.
Business type: Video ASP
Made the cut: We are at the start of a multi-billion dollar push of video on the net and Extend Media is a prime beneficiary. Now that News Corp. and it consortium have decided to build their own online video platform we expect other owners of video assets to launch initiatives or join the consortium. Beneficiaries are companies like Extend Media which powers video sites from Clickstar, ShowTime Networks (CBS), and Canada's Corus Entertainment.
Competition: Move Networks, Permission TV, The Platform, Entriq, and Brightcove. Also, some broadcasters like ABC/Disney have decided to build their video platforms in-house.
Read - alarm:clock profile

ClubPenguin
HQ: Kelowna, BC
Funding: Bootstrapped by founders.
Business Type: Social network for tweeners that uses penguin avatars.
Made The Cut:Club Penguin is shaping up to be the digital age Disney. It has been described as crack for kids. Traffic share jumped by more than sevenfold in the past 12 months and its share is higher than Second Life's and World of Warcraft's combined. Some have reported that Sony is in talks to buy Club Penguin for $450M , 7.5x 2007 projected revenue of about $60M.
Competition: Imbee, Webkinz, Neopets (Viacom).
Read - Sony Wants To Buy Kids Social Network For $450M (the a:c)

EQO
HQ: Vancouver, BC
Funding: Closed Series B funding at $9M from BDC Venture Capital, Ventures West, GrowthWorks.
Business type: EQO lets you take your IM contacts with you on your mobile phone. Plus you can send text and picture messages and link calls to your friends. We underline users ability to make free or almost free cell phone calls.
Made the cut: EQO claims 100K users. Lots of competition here but for a reason as free cell phones makes consumers drool. CEO Bill Tam ran marketing for MetroNet Communications, which was bought by AT&T. Seems like a good fit.
Competitors: iSkoot is the big one as it has been tapped by Skype. Also, Rebtel, SupCast.com, Mojungle.com, Jaiku.com and another Canadian startup, Mobivox.
Read - more

Weblo
HQ: Montreal
Funding: Oak Investment Partners just invested.
Business Type: Virtual world economy. Unlike competitor Second Life, Weblo keeps it real, selling simulations of everything in the real world: the city of Vancouver, Avril Lavigne, the Montreal Canadians.
Made The Cut: Although it only launched last December, the company claims that it will pull in $2M in revenue in the second quarter of 2007, and $10M in revenue by the end of 2007. Whoa. Founder CEO Rocky Mirza has done a few other startups but its unknown if he can manage this rocket ship.
Competition: SecondLife, TheSimsOnline, Fatfoogoo (pre-launch)
Read - Virtual State of CA Sells For $53K on Weblo (the a:c)

OZ Communications
HQ: Montreal
Funding: Raised $34M in a second round. It has raised $61M to date. Canadian fund manager Caisse de depot et placement du Quebec led the latest round.
Business Type: Consumer mobile messaging
Made The Cut:Oz has been very successful closing deals with carriers like Cingular, Sprint, T-Mobile, Virgin Mobile USA, handset companies like Motorola, Nokia, and Samsung They just made an interesting acquisition of Thumbspeed, which helps push them beyond SMS and into the realm of mobile social networking.
Competition: Flurry, Movamail.
Read - Gigaom profile

Geosign
HQ: Guelph, Ontario,
Funding: In March 2007, Geosign raised $160M from American Capital Strategies (Nasdaq: ACAS).
Business Type: Geosign has a portfolio of over 150 websites in 15 verticals and it claims more than 35M monthly visitors. The company has figured out which niches advertisers will spend money on then builds sites or buys them for that niche. Geosign recently invested $13M in Go2 Directory Systems, a mobile directories company that claims to have been the first mobile 411 company. And it has been building out social networks around its sites.
Made The Cut: Geosign flies under the radar, but we can't imagine there are many larger online publishers in Canada and it has not let up with its ambitions. At least check it had 250 employees. CEO Tim Nye had run CADSOFT which was sold to RAND in 1998.
Competition: Demand Media, Reinvent Technology (to be launched).
Read - Q&A With CEO Tim Nye (Frank Schilling blog)

Plenty of Fish
HQ: Vancouver, BC
Funding: Bootsrapped
Business Type: Free dating network
Made The Cut: The Wall Street Journal notes about the company: “What may be, on a per-capita basis, the busiest, most profitable site on the entire World Wide Web.” According to the WSJ, the site makes somewhere between $5M and $10M a year from Google AdSense and affiliate links. This is a one person company and he is not terribly experienced with building companies but who really cares with this kind of growth.
Competition: OK Cupid.
Read - alarm:clock profile
Read - Wall Street Journal story

Fresh Books (aka 2nd Site)
HQ: Toronto
Funding: Bootstrapped
Business Type: Online invoicing and time tracking service that allows users to automatically send invoices to customers by US Postal Mail. Pricing is free up to $150 p/month.
Made The Cut: Claims 170K users and has become a darling of users and reviewers. The company's API has many other companies connecting their tools.
Competition: BillMyClients and Blinksale.
Read - Mashable review