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Report on Business Montreal telemedicine startup Dialogue raises $40-million in financing led by Caisse

Montreal-based telemedicine startup Dialogue has raised $40-million in venture capital, led by the Caisse de dépôt et placement du Québec and Germany’s Holtzbrinck Ventures.

The three-year-old company has 400 enterprise customers, about half of whom are in Quebec and another 40 per cent in the rest of Canada, including National Bank of Canada, Lightspeed POS, Industrial Alliance, Air Canada Vacations and Stingray Digital Group. They offer Dialogue’s doctor-on-demand service to their hundreds of thousands of employees, who access the live professionals through their computers and smartphones. Revenue exceeds $10-million annually.

“The company has had exceptional growth,” said Jean-François Marcoux, a Dialogue board member and managing partner with White Star Capital, an investor in the startup. "Adoption of telemedicine and demand across Canada has been much faster than we anticipated,” with demand increasingly coming from larger firms.

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Dialogue also recently purchased artificial-intelligence startup DXA, which allows hospital emergency departments to more effectively triage patients using software. Dialogue is piloting the service with the Centre hospitalier de l’Université de Montréal and will be deploying the technology at Germany’s Hospital Berlin-Buch.

“We have many international leading hospitals in the pipeline for this technology,” Dialogue chief executive and co-founder Cherif Habib said.

Mr. Marcoux said the AI offering “could be a business on its own. It’s hard to quantify [the opportunity] at this stage. It’s more optionality at this stage than anything else."

Also participating in the financing are Toronto’s First Ascent Ventures as well as past investors Portag3 Ventures – backed by Power Financial Corp. entities and outside investors – White Star Capital, Walter Capital and National Bank of Canada.

The Caisse, which has emerged as one of the top Canadian financiers of Canadian technology companies, particularly those based in Quebec, is making its investment through a recently announced $250-million fund earmarked for AI startups. Dialogue had previously raised $16-million, including $4-million in seed financing led by Power-affiliated incubator Diagram.

Mr. Habib said the new financing would help the company, whose service is distributed through SSQ Insurance and Power Corp.-controlled Great-West Life Assurance Co., double its employee count to 500 people by late next year and expand to Germany, where a majority of the country’s state governments have recently allowed the introduction of telemedicine services.

He said Dialogue will focus international expansion on European countries, which, like Canada, offer publicly funded medicare systems, while avoiding the United States, where the health-care market “is too different from ours, so our know-how might not be as relevant.“

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Editor’s note: Portag3 Ventures is backed by Power Financial Corp. entities and outside investors. Incorrect information appeared in an earlier version of this story.

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