The vaunted unicorn: It’s every startup’s dream, right? But what does it really take to get to that legendary $1B USD valuation? If you ask CIBC Innovation Banking, they might give you an unexpected answer: unicorn fuel.
To some, a term like “unicorn fuel” might sound a little too good to be true, but a quick look at CIBC Innovation Banking’s portfolio makes it clear they’re on to something. Take Expensify, the expense management app that went public in November 2021. David Barrett, Expensify’s CEO and founder, credits CIBC’s creativity and entrepreneurial spirit for helping fuel his company’s massive growth. “At every point in the process they were so supportive and so creative,” Barrett said in a 2019 interview. “We just realized, oh, we’ve got a partner for life here.”
So what exactly is the secret ingredient in CIBC’s unicorn fuel?
According to CIBC Innovation Banking President & Executive Managing Director Mark McQueen, it starts with really understanding their clients and what they need – an approach that goes back to CIBC Innovation Banking’s roots as startup VC firm Wellington Financial, which McQueen founded in 2000. Driven by McQueen’s entrepreneurialism, the firm quickly became one of Canada’s leading growth capital lenders in tech; by 2018, the company had grown from its initial $7M fund to a $900M investment program, primarily focused on technology and life sciences entrepreneurs.
With CIBC’s acquisition of Wellington and subsequent launch of CIBC Innovation Banking, however, the team was quickly able to provide access to capital on a scale that was unmatched in the market. This, combined with the firm’s deep knowledge of the innovation economy, meant McQueen and his team could think bigger and provide the kind of flexible, long-term support that the Expensify’s of the world need to accelerate to IPO.
Partner for life
In fact, it was exactly this combination of flexibility and capability that made Expensify realize CIBC could be a “partner for life.” Expensify is known as much for their business savvy as for their penchant for stomping all over the corporate playbook (just look at their IPO announcement). Launched in 2008, the Portland-based software platform turned a profit almost immediately, which meant that they didn’t have to rely on venture capitalists to fund their growth. In fact, in 2018, when they reached an agreement with CIBC, they had only raised about $27.2 million, a fraction of what most tech startups need to really get off the ground.
As Expensify grew, they continued to buck Silicon Valley trends by focusing on profits instead of rapid growth – a decision that kept more of the company in the founders’ hands, ensuring they could expand at their own speed and not let their vision get diluted by a board of investors, who might have balked at, among other things, funding a Super Bowl commercial featuring Adam Scott and 2 Chainz. (In the end, Expensify’s marketing instincts, like their business instincts, proved bang on. The ad went viral, solidifying Expensify’s reputation as the coolest fintech in town and making them the first-ever fintech company to win a Cannes Lion.)
“Recognizing a great idea is one thing. Knowing how to fuel it is another.”
As Expensify’s growth accelerated, Barrett and his team began looking for banking partners who understood their vision and could think outside the Silicon Valley box. The flexibility CIBC Innovation Banking offered was something Barrett simply couldn’t get from other lenders. The entrepreneurial team at CIBC not only understood what they were trying to do with the business; they were creative in finding ways to help them make the numbers work. CIBC offered debt facility services to undergird the company’s expansion, which let Expensify leverage their profits in much more efficient ways. The result? Expensify was able to invest more in their employees, make strategic hires, and scale exponentially – to the point where going public was just the next logical step.
In the words of McQueen: “Recognizing a great idea is one thing. Knowing how to fuel it is another. That’s where we excel.” Expensify’s strong debut on the Nasdaq appears to bear that out.
“We go where our clients go.”
So with another unicorn trading in the public markets, what’s on the horizon for CIBC Innovation Banking? If you ask the team, they’ll tell you it’s contingent on what’s next for their clients, or as McQueen puts it: “We go where our clients go.” Since 2020, CIBC Innovation Banking has grown to eleven offices across North America and they’re currently expanding into Europe.
It’s all part of the bank’s client-led strategy. “Building successful client relationships,” notes McQueen, “means getting to know our clients in depth, going to where they do business and putting the right people in place to provide on-the-ground support.”
In other words, expect more unicorn fuel.