Canal Partners, an early stage venture capital firm based in Scottsdale, Ariz., has sold its interest in WebPT to the Silicon Valley-based venture capital firm Battery Ventures. The sale yielded a return of 16 times Canal Partners’ initial investment, representing one of the firm’s most successful and lucrative exits to date.
An early investor in WebPT, Canal Partners helped the cloud-based electronic medical record (EMR) company achieve scale, garner significant market share, and evolve from a documentation system for physical, occupational and speech therapists to a complete software solution for the outpatient rehab therapy businesses. With the help of the initial $1-million investment from Canal Partners in December of 2010, the software-as-a-service (SaaS) company became one of the fastest-growing software companies in Arizona and one of the fastest-growing EMR software companies in the country within two years.
“When we discovered WebPT, we were blown away by what co-founders Heidi and Brad Jannenga had built,” said Todd Belfer, managing partner at Canal Partners. “We recognized their ability to scale very quickly and become a strong market leader in their industry. They proved us right and have been one of our best portfolio success stories. WebPT has matured well beyond our early stage investment, and as they move into their next chapter of growth, they’re in great hands with Battery Ventures.”
“We’re proud of what WebPT has done for the rehab therapy community as well as Arizona’s tech scene,” said Jim Armstrong, managing partner at Canal Partners. “They’ve created an amazing culture and truly are the hallmark of what every investor looks for in a portfolio company.”
Beyond providing investment, Canal Partners became a true partner in WebPT, providing counsel on business strategy, operations and growth. Jim Armstrong also took a seat on WebPT’s board of directors at the time of the initial investment.
“We did not take the decision to bring in outside investment lightly,” said Heidi Jannenga, co-founder and president of WebPT. “We did our due diligence in finding a true partner that would align with our culture and believe wholeheartedly in our vision, and Canal Partners fit that bill. It turned out to be a great decision and partnership, and was so imperative to our early growth.”
Canal Partners invests in a wide variety of B2B technology and SaaS companies and prides itself on providing support and guidance to help its portfolio companies reach maximum growth. Beyond providing capital, they take active strategic, advisory and board roles in the companies in which they invest.