Canadian Tech Company Secures US$235M Investment from Teachers’ Pension Fund

Finding someone to invest in StackAdapt Inc. wasn’t easy. Its three co-founders barely knew each other when they founded the company in 2013. They had little experience starting up and they were building ad tech in an established market. “Looking back, would I have invested in us? I don’t know,” chief executive officer and co-founder Vitaly Pecherskiy said.

Just early on, the trio scraped together less than $5-million from three investors. It wasn’t much. But it was all the scrappy founders needed to fuel one of the most impressive growth spurts in Canadian technology. Now the 1,300 person Toronto company is set to take its place among Canada’s startup elite.

StackAdapt is announcing on Tuesday that the Ontario Teachers’ Pension Plan has led a US$235-million financing, backed by Intrepid Growth Partners and four other investors. It’s the first investment for Intrepid, co-led by former Canada Pension Plan Investment Board CEO Mark Machin, after raising US$300-million so far for its inaugural fund. The syndicate is acquiring most of its stake from current investors, representing the latest of a series of significant secondary equity transactions involving privately held tech firms. The deal pegs the valuation of StackAdapt at about US$2.5-billion.

“They’ve consistently shown profitable, capital-efficient growth and reached a huge scale,” said Olivia Steedman, an executive managing director with Teachers’ Venture Growth, which invests in emerging technology titans across the globe. “When we see those things, we get excited.

StackAdapt’s Journey from Small Beginnings to Major Growth

StackAdapt is expected to generate more than US$500-million in revenue and US$125-million in operating earnings by 2025, making it one of the largest and most profitable private tech companies in Canada. It has even paid millions in dividends. It did all of that quietly; StackAdapt didn’t even announce when private equity firm Summit Partners bought a US$300-million stake in a 2022 secondary deal, valuing the company at more than US$1-billion.

The new deal, designed to heighten StackAdapt’s profile ahead of a potential public offering in the next few years, comes at a critical juncture. Canadian tech has come of age: A recent investigation by The Globe and Mail found 71 private companies have reached US$100-million in annual revenue, including StackAdapt, which generated nearly US$400-million in 2024. >

Meanwhile, StackAdapt stands out amid an unprecedented tariff war with the United States as the kind of digital growth engine that tech sector advocates have long said Canada needs in order to lessen its reliance on the trade of physical goods. “Its success should be a terrific boost to Canada’s technology and innovation sector at arguably a difficult time,” Mr. Machin said. “The more companies we have like Shopify and StackAdapt, the wealthier the ecosystem becomes and there will be more entrepreneurs that have the capacity to stay and build.”

StackAdapt operates a demand-side advertising platform (DSP) that agencies and brands use to place ads on websites and digital channels. Mr. Pecherskiy and the original CEO Ildar Shar, who are Russian immigrants, came up with the idea while working for the advertising multinational WPP PLC in Toronto. They hated the “super clunky and slow” platforms they used to place ads and felt they could make a better alternative, said Mr. Pecherskiy, who now lives in the Ottawa area. “We were building a product for our former selves. >

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The founders teamed up with computer scientist Yang Han, now StackAdapt’s chief technology officer, who had built trading software for Bloomberg LP. Together, they could build a platform that incorporated machine learning and artificial intelligence when that approach was new to adtech.

They specialized in native advertising, a young field that permitted ads to merge with their surroundings on web properties, unlike the easily ignored banner ads. In order to gain early customers, they promised that advertisers would pay only when the visitors engaged with content, and not when they clicked through.

StackAdapt started to gain traction with small agencies and brands. Within a year of launching in spring 2014, the company generated $1-million in revenue and consistently met its objectives as it expanded its platform.

That impressed Matthew Leibowitz, managing director of Toronto’s Plaza Ventures, who decided to invest. “Adtech wasn’t exactly the sexiest industry but it has one of the largest total addressable markets in the world. The company was growing rapidly, they had strong unit economics and, with the right execution, I thought it could be a force of nature,” he said.

But Mr. Leibowitz couldn’t get others to buy in. The space was competitive-the DSP specialists The Trade Desk, Criteo SA and Simpli.fi, and the tech giants Google and Amazon.com Inc., among others-and many adtech startups had died. “I took it to a dozen friends. Everyone passed,” he said. Plaza invested $1-million in 2016 and more in subsequent years. >

Customers consistently rank StackAdapt the best DSP, according to market tracking site G2. And the company capitalized on industry shifts as streaming services and smart TVs, digital billboards, podcasts and online games ate into the dominant flow of web traffic that went to closed platforms such as Facebook and Google, which guarded user data they collected.

Now, players on the so-called “open internet” have a better handle on who visits their sites – and StackAdapt has become a key tool for advertisers to plan and place ads based on data derived from AI. The company has also recently introduced the ability for customers to create ads on its platform, unlike competitors that are primarily content distributors.

Meanwhile, the relatively small group of investors who showed StackAdapt some love back when it still was a dreamer have more than reaped the rewards. The Ontario government-backed MaRS Investment Accelerator Fund – which led the company’s 2014 $750,000 seed round – and Plaza and MaRS Investment Accelerator Fund have made some of the best ever returns by a Canadian fund simply due to the bets they took on StackAdapt: both have cashed out an estimated 100 times or more the original investment into StackAdapt – and retain shares worth enormously more than they originally invested in the company.

It’s one of several lucrative investments for Plaza, which has backed four other Canadian US$100-million-revenue club members (Super, Miovision Technologies Inc., Neo Financial Technologies Inc. and Site 20/20). Asked about the low-profile fund manager’s success, Mr. Leibowitz said only: “I like to celebrate my companies, not me.”