What’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.
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.