Canadian Tech Success Stories – Plusgrade
The Canadian technology landscape has flourished immensely over recent years. When people look at the Canadian ecosystem, success stories such as Shopify often come to mind. The Ottawa-based e-commerce software provider has grown into a global powerhouse. However, there are many underrated instances that have occurred over recent years. One such case is that of Plusgrade. Plusgrade was founded in 2009, in Montreal, and is a developer of an ancillary revenue optimization platform largely serving the travel and hospitality industry to manage and optimize revenue generated from seat upgrades and other premium services. In this month’s blog we’ll be going over the story of Plusgrade, from inception into the muti-billion-dollar company it is today.
2009 - 2015
Plusgrade was founded in 2009 by Ken Harris, after observing while traveling the opportunity to monetize empty premium seats[1]. From 2009 until 2015 the company grew to serving 35 premier airlines globally and opened an office in New York[2]. Ancillary revenue growing as a priority in the strategy of airlines allowed Plusgrade to establish the business, and lead to interest from investors to elevate the business to the next level.
2015 - 2018
In August of 2015, Private Equity firm TA Associates invested an undisclosed amount into Plusgrade. The investment allowed Plusgrade to fuel its continued growth, along with leveraging the expertise from an established investor in TA. Ken Harris remained in his position as CEO and continued executing on the proven strategies that had made the business so successful.
During this period, Plusgrade achieved 221% revenue growth[3], and was recognized on Deloitte’s Technology Fast 500 program.
2018 - 2024
In November of 2018, Plusgrade saw a significant C$200mm investment into the firm by CDPQ, as they acquired a portion of the shares held by TA Associates. The transaction valued the company at more than C$600mm. The partnership with CDPQ continued to fuel growth through entering new markets and expanding the product suite[4].
In 2019, as a result of the success they saw with enterprise clients, they were named a recipient of Deloitte’s inaugural Fast 15 list, which recognizes the fastest-growing enterprise-level technology, media and telecommunications firms.
The COVID-19 pandemic saw many industries hit hard, but travel was one of the most significant. However, Plusgrade was able to be resilient, and in September 2021, Canadian PE investor Novacap invested in the company as well[5].
With multiple injections of Private Equity capital into the firm, Plusgrade was equipped to aggressively pursue growth, both organically, and inorganically.
The inorganic growth for Plusgrade began in May of 2022, through its acquisition of Points worth just shy of C$500mm[6]. Points, a leader in powering loyalty commerce was a significant strategic acquisition in pursuit of becoming a global leader in providing value-adding and revenue generating services for their partners in airline, hospitality, and rail among other industries.
With its original market being focused on the travel space (more specifically airline), the next acquisition for Plusgrade looked to expand further in hospitality. In January of 2023 Plusgrade acquired UpStay, a quickly growing provider of ancillary revenue solutions, which at the time of the acquisition was serving hundreds of hotels across 17 countries[7].
These acquisitions grew both the offerings available, along with their positioning across new verticals, setting the company up for sustained growth.
Plusgrade also recognized substantial organic growth during this time as well, as in February of 2023 they announced a partnership with AirAsia[8], growing their presence with airline customers, which had been crucial to their early success.
Despite already establishing themselves as a global leader, Plusgrade continued to bolster its leadership team in February of 2023, as Calin Rovinescu the former CEO of Air Canada joined the firm as a board member and an investor[9].
2024 - Present
Plusgrade’s journey reached a critical juncture in March of 2024 as Private Equity firm General Atlantic acquired a majority stake, in a deal worth more than US$1bn, valuing the company north of US$2bn[10]. General Atlantic had said that it intends to support the continued growth of Plusgrade, with a focus on new business segments, go-to-market efforts, and M&A opportunities.
Following the investment from General Atlantic, Plusgrade continues to operate with founder Ken Harris as CEO. It will be curious to see what they do next, as their story is unfinished. But their emergence and growth is an industry case study in Canadian tech, from being founded in 2009, taking on American Private Equity funding in 2015, bringing in Canadian investors, expanding through acquisition, and leveraging industry experts ultimately led them to a 10-figure valuation.
Stories like Plusgrade show how strong the Canadian tech ecosystem is, and the heights its companies can achieve.
[1] Quebec's travel industry pioneer Ken Harris is Canada's EY Entrepreneur Of The Year® 2024
[2] TA Associates Announces Investment in Plusgrade | Business Wire
[3] Plusgrade Named Recipient of the Inaugural Deloitte Enterprise Fast 15 List | Business Wire
[4] Caisse invests $200 mln in TA Associates-backed Plusgrade | PE Hub
[5] Novacap Becomes a Major Investor in Plusgrade to Power the Growth of Critical Revenue Streams Through the Global Travel Industry
[6] Plusgrade to Acquire Points in an All Cash Transaction
[7] Plusgrade Acquires UpStay to Expand its Portfolio of Upgrade and Ancillary Revenue Solutions for the Hospitality Industry
[8] AirAsia and Plusgrade Announce Partnership to Enable Bid for Upgrades and Extra Seating Space for Travelers - PR Newswire APAC
[9] PAX - Former Air Canada CEO joins Plusgrade as board member, investor
[10] General Atlantic becomes major investor in travel perks platform Plusgrade | BetaKit