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XPND Capital

03 May 2013 by National Bank
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Over the 20 years that he’s been launching startups, Alexandre Taillefer has run the whole range of emotions that go with the territory. And that’s where his talent for identifying successful entrepreneurs comes from.

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Serial visionary

“We invest in people,” says the managing partner of XPND Capital (pronounced “expand”). “The best business people can adapt to markets and change course without obsessing about their original plans. They are motivators and leaders who work hard and show their people what qualifies as a job well done.”

Managing a $20M fund invested in technology, media and entertainment companies, Taillefer sees himself as a “manager of artists”. And the great thing about being a manager is that he doesn’t have to do it himself.

“I had my successes, which gave me a feel for the terrain. I can now pass on those key instincts to others,” he says. “What I like about what I’m doing is the wide range of business models that cross my desk. Breaking into new markets is exciting stuff.”

Among XPND Capital’s discoveries is Lumenpulse, manufacturer of architectural LED lighting; Gsmprjct Création, which creates turnkey experiences like Star Wars Identities in Montreal or the Burj Khalifa tower observatory in Dubai; and Acquisio, an online ad campaign management platform.

“What makes us different is that we get involved in the actual operations of the companies we support, whether it has to do with human resources, marketing or finance,” says Taillefer.

You don’t have to explain leadership to this serial entrepreneur, whose businesses have undergone growth in all its forms, whether privately held or public.

One brainwave after another

After his initiation into business DJing at corporate events, Taillefer started a Web design firm in 1993, when Web site development was a complete mystery for most companies. A forerunner in this fledgling industry, Intellia was acquired by Québécor in 1996 and renamed Nurun – which is today a market leader.

In 2001 he bet on a new hunch: games on mobile phones. After a couple of tough years in a market that needed to be built from the ground up, his development studio was acquired by a global digital entertainment brand. Taillefer left in 2007 to start his third company, Stingray Digital.

This time he set his sights on karaoke. “The market was under-developed, the machines were complicated, the industry was inefficient,” says the entrepreneur, who joined forces with Eric Boyko and François-Charles Sirois to launch an all-out offensive in the segment.

“We bought the Soundchoice company, which owned 17,000 titles, as well as a karaoke chain. We distributed the music over the Internet and mobile phones and aggressively protected our copyrights. And that’s when the Galaxie people came to us.”

That day, Taillefer’s crystal ball glowed anew. Instead of licensing his karaoke services to Galaxie, he turned the tables and offered to buy out the music network. It was a huge mouthful at $80M, but he was a believer.

Consolidate rather than be consolidated

“We were convinced of our long-term profitability. But we had to convince our lenders. The National Bank helped make that happen. They believed in our potential thanks mostly to the relationship we had developed over the years. Part of that is believing in our entrepreneurial vision, which is to consolidate rather than be consolidated,” Taillefer explains.

Other acquisitions followed (Max Trax, Muzak, Concert TV) which propelled Stingray to the pinnacle of its industry. In Quebec alone, ten million households subscribe to its services. But his never ending fascination with the unknown led Taillefer to new frontiers in 2010 and the creation of XPND Capital.

Evidently, he already has the sequel in mind: XPND 2, a $100M development fund. And to expand his personal horizons, he sits as chairman of the board for Montreal’s Musée d’art contemporain.

“I love art,” says the avid collector. “After crunching numbers all day I have to feed my soul. Art gives me that chance every day.”

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