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What’s Happening with Canada’s VC Landscape?

canada venture capitalWhat’s going on with Canada’s venture capital industry? From a troubling dearth of new funds a year ago, we’re seeing a string of new funds being unveiled.

The new fund on the block is Rho Ventures Canada, which announced a new $100-million vehicle backed by Teralys Capital, Ontario Venture Capital FundNorthleaf Capital Partners and BDC.

This comes on the heels of Celtic House Ventures raising a $105-million fund earlier this week, which also included Teralys, BDC and OVCF. Last December, iNovia unveiled a $110-million fund, while OMERS launched a $180-million fund last October.

This is clearly great news for Canadian entrepreneurs and startups, who have been grappling with a lack of venture capital to support a growing amount of activity. In some sense, it also reflects how VCs and institutional investors are starting to play catch up to Canada’s startup renaissance.

Here’s a quick Q&A with Rho’s Roger Chabra:

What is the new fund focused on?
It’s focused on early stage investing in Canadian companies within the technology and digital media sectors. The important themes for us currently include mobility, e-commerce, Web services, advertising technology, big data, enterprise software and energy technology.

What will it invest in?
We will invest mostly in Series A stage companies, but we will also do a selected number of seed deals. We have invested as little as $250,000 in an initial investment and as much as $7.5-million, but the typical initial investment for us is between $2-million to $5-million. We also look to participate in future financing rounds after our initial investment in companies that we believe strongly in – we can invest as much as $10-million in a company over time.

How was the fund-raising process?
Fund raising is an ongoing process and we began thinking about raising our second Canadian fund some time ago. In terms of formally marketing the fund to investors, we began about a year and a half ago. We are thrilled to have the fund in place, but the real work starts now. The work of finding great entrepreneurs to partner with and the work of adding value to their visions on a daily basis.

Is the Canadian VC landscape improving given the launch of new funds?
Yes. Venture capital is not for the faint of heart for either VCs or entrepreneurs, and it’s not for the faint of heart institutional investors either. We are incredibly lucky to have some very forward thinking investors in our funds. They share our vision of building billion dollar companies here in Canada. We all have a lot of work to do to convince even more institutions to invest in the venture asset class.

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  • Pingback: Ontario venture capital fund gives out $70-million | Pham Capital

  • http://www.facebook.com/profile.php?id=600690652 Steven Green

    Mark,

    Here is some new news hot off the press – Klass Capital has partnered  with HOOPP and now their fund is at $50 million.  I included the press release below.  More money for all us tech entrepreneurs!

    We wanted to share a recent development in our fund with you. On April 24th we announced our partnership with Healthcare of Ontario Pension Plan (HOOPP).HOOPP’s commitment has increased the size of Klass Capital Fund I, L.P., to $50 million, making us one of the larger venture capital firms in Canada. HOOPP oversees $40 billion of assets and through HOOPP Capital Partners it has invested approximately $2 billion directly into companies and fund arrangements.Our primary focus is on high-growth software businesses where we can invest $2 million to $10 million to significantly accelerate their business plan. Since our inception a year ago we have made a number of investments in high-growth, cloud-based companies. With the use of our investment, these businesses were able to achieve significant growth. Within the coming weeks we are planning to close two additional investments in SaaS focused businesses. These companies are experiencing substantial international sales growth and have revenues in the range of $10 million to $100 million.