Waterloo video-connectivity company Dejero has announced a CDN$60-million recapitalization that refreshes its roster of investors and positions the company for continued growth.
The minority stake recapitalization was led by Vertu Capital of Toronto in partnership with Ubicom Ventures, a special-purpose investment entity set up in partnership with Dejero founder Bogdan Frusina and CEO Bruce Anderson.
Under the recapitalization, previous investors Kayne Partners of Los Angeles and Intelsat of Luxembourg will exit, Frusina said. Kayne and Intelsat had invested in the Waterloo company through Dejero’s CDN$32-million Series B raise in 2017.
In an interview, Frusina said the recapitalization arrangement was the best option for setting Dejero up for continued growth.
The company, founded in 2008, had reached the size where Frusina and Anderson had to decide whether to continue growing the company or consider selling control to a larger company or a private-equity firm.
“We were at a crossroads,” Frusina said. “A lot of companies grow to a certain level and then once they grow to that level, usually you end up selling. That happens over and over in Canada.”
Frusina and Anderson decided they wanted to continue building the company.
The recapitalization was “more about finding a different set of partners… and really aligning management and the Vertu team and the Ubicom team to take (Dejero) to the next level.”
The deal allows management to retain the biggest say in the company’s future, Frusina said.
“We didn’t want to sell out to a private equity firm and be done with it. It was important for our customers to make sure that we still have control of the business, that we still have the ability to grow this business, that we don’t have to squeeze every dollar out of it. We really wanted to give our customers the opportunity, and our ability, to deliver future products and services in the industries that we’re in.”
Dejero started out in 2008 helping news organizations transmit video feeds reliably and remotely without the need for expensive satellite trucks. The company has evolved into a multinational that helps governments and companies in a wide range of industries deliver a more resilient internet connection. It does this, in part, by combining multiple connection paths – including cellular, satellite and broadband – from different providers to form a virtual “network of networks.”
The pandemic and the rise of remote work has only enhanced the need for organizations to have secure, reliable internet connections, Frusina said.
“Connectivity has become a utility,” he said. “It’s now an issue for everyone. It’s really important, it’s like water.”
Dejero’s growth plans include a continued focus on the enterprise market, government and public safety, broadcasting, media production, and some transit agencies, Frusina said.
Dejero will likely hire more employees going forward, he said, but there are no specific plans for an immediate increase. The company currently employs 139 people – 126 in Waterloo and 13 in locations in the United States and the United Kingdom.
In a news release, Vertu Capital founder and Managing Partner Lisa Melchior said she was excited to be part of a “new chapter” in the Dejero story.
“Canada’s technology ecosystem is thriving, and we are excited to be playing a vital role by actively partnering with premier companies that are at critical points of inflection in their growth and scale,” said Melchior, who previously led the North American Technology Group at OMERS Private Equity. “Dejero exemplifies a Vertu investment; the company has an established world-leading technology solution and is accelerating its expansion into multiple global markets. We are thrilled to be partnering with Bruce, Bogdan and the entire Dejero management team on this exciting new chapter for the company.”
Ubicom Ventures, the special-purpose investment fund, is managed by veteran investment leaders Terry Thib, Neil Maruoka and Gajan Kulasingam, in partnership with Dejero’s Frusina and Anderson.
“We are thrilled about the opportunity that Dejero brings to our investors,” Thib said. “Our mission is to identify disruptive technologies that can be deployed on a global scale. Through our partnership with Bruce and Bogdan, we are excited to play a critical role in the evolution of Dejero as it continues to tackle burgeoning critical connectivity markets that will benefit from its cutting-edge technology.”