Fast-growing Ottawa IT services firm Pythian has landed a new round of investment to help fund its ambitious expansion plans, announcing this week it closed a $15-million mezzanine financing deal with BDC Capital.
The company says it will use the cash to expand its cloud-based and big-data analytics services as well as hire more people at a new satellite office in London it opened in mid-January to serve the lucrative European market. Pythian says revenues from the European region have increased by more than 150 per cent over the past year.
“We’re certainly seeing that the growth in Europe right now is faster than in just about every other region in the world,” Pythian vice-president of marketing Lynda Partner told OBJ.
“It’s a big market. Until now, we’ve had a very small team and basically said to them, ‘Go figure out if the European market is something that is really going to grow as it has in North America.’ They’ve proven over the last year that they’re able to accelerate revenues faster than in any other part of the world.”
Mezzanine financing is essentially a loan in which the company itself is the collateral. Under the deal, BDC Capital will not take an equity stake in Pythian.
“Pythian and BDC Capital have been partners for 10 years, and we appreciate their entrepreneurial approach and ongoing enthusiastic support,” Paul Vallee, Pythian’s founder, CEO and majority owner, said in a statement.
It’s the second major financing agreement between the two partners in the past three years. BDC also led a $6-million investment in Pythian in 2014, and the latest deal refinances that agreement so that both loans will mature at the same time.
“Pythian has exceeded our expectations by multiplying its revenue by 10 since our first investment,” said Cyril Cochrane, Ottawa managing director of growth and transition capital at BDC Capital. “In our view, Pythian is well positioned to grow more prominent globally in the coming years.”
The firm employs a total of about 400 people in more than 30 countries, including 100 at its corporate headquarters on McRae Avenue. In addition to its new London office, Pythian also has foreign offices in New York, San Francisco, Sydney and Hyderabad, India. Founded in 1997, the company has clients around the world, including well-known names such as American Apparel, Fox Sports, Giant Tiger and National Geographic.
Last month, the editors of Canada’s Top 100 Employers named Pythian one of the country’s top small and medium-sized employers for the fourth consecutive year.