Among Canadian VCs, iNovia has been active with Canadian and U.S. startups. Earlier this week, it was in the news again after leading a $5-million investment in Montreal-based Luxury Retreats. I had a chance to do a quick Q&A with Chris Arsensault, an iNovia partner, about the deal and the Canadian startup landscape.
What’s your take on the Canadian startup landscape these days?
Overall, I have been a big proponent of what is going on within the entrepreneurial front across Canada. There are two phenomena we have observed over the past five years – a lot of entrepreneurs are heads down and building big business, but they’re not visible. On the other side of the coin, startup communities being built, VCs and investors are working together, and entrepreneurs using each other to identify opportunities.
Tell me about Luxury Retreats?
Luxury Retreats hadn’t raised capital before. They didn’t do it because they didn’t think about it or took it into consideration. They always saw growth in their own business. Joe [Poulin, Luxury Retreats' CEO] is an amazing entrepreneur, and that is what caught our attention. Second, he has been heads down building a vertical, and going big into it. The technology on the backend is awesome and the business has great opportunities. He is now becoming visible and giving hope and new insight for other entrepreneurs to realize that anybody can do it and stick to what you want to build and focus.
How did you find Luxury Retreats?
We found Joe about two years ago through people we knew. When we started talking, his first comment was “No, I don’t need capital. I’m an entrepreneur, I generate my own cash and build the company with the cash I have.” We started collaborating at that point. Once we helped him attract top management, we introduced him to some of the key players in the Valley and New York that are value add. Once he saw the value of bringing in a partner like iNovia, that is we when started talking terms and what made sense. Joe has a lot of vision and ambition. If Joe wanted to sell the company, he could sell it tomorrow morning. What he wants to do is build a huge company. I love the fact he has the drive and ambition and the people he attracting as channel partners, technology partners and management I am betting he will be building a huge company.
What did you see from Canadian startups?
We are seeing great deal flow. The landscape is continuing to evolve. We will hear about more hidden treasures; sleeping beauty companies no one has heard about that have 50 to 100 employees. I think we will hear of these types of deals over the next two, three years, as well as a lot of results from emerging entrepreneurs who are building startups. These are people such as [GoInstant’s] Jevon MacDonald, whose success in selling to Salesforce will have a huge impact on Canada, both in relationships with corporate and startups, with VCs and entrepreneurs wanting to make a difference.
What would you like to see happen within Canadian startups?
I want to see more Canadian companies becoming acquirers rather than selling. Last year, there was 31 exists, 27 done by U.S. companies and four by Canadian companies. Wouldn’t it be great if half were done by Canadian companies? That would change the whole dynamic. If you had growth companies becoming $100 million+ revenue companies, then you have a real competitive landscape in Canada. There are a lot of baby steps and transactions like what we are seeing with Luxury Retreats, and what OMERS has done in the last two or three deals will shed new light on the Canadian landscape.