Inovia keeps faith in country's tech startups despite turmoil
Inovia Capital, Canada's largest early stage investor, has closed a significant fundraising round for one of its venture funds, signalling optimism in the tech startup community amid economic and public market turmoil.
Inovia raised US$325 million for its fifth early stage fund called Venture Fund V, bringing its total managed capital to US$2.2 billion, the Montreal-based company announced Wednesday.
Karam Nijjar, a partner at Inovia, said the venture fund will continue its strategy of investing in mainly software-as-a-service and business-to-business companies, as well as retail and commerce, travel and digital health.
“Overall, we're still optimistic,” Nijjar said. “When we're investing in seeds and series As, these companies are not going to exit for seven, eight, nine, 10 years. So we try to shield our founders from that noise of what's going on in the markets because nobody can predict where (the market) will be when those companies eventually have to exit.”
Investors in the fund include existing backers the Caisse de dépôt et placement du Québec, BDC Capital, Harbourvest, Northleaf Capital and AVAC, among others. The fund also brought in two new institutional investors, British Columbia Investment Management Corporation and Trans-canada Capital, The Logic reported.
Inovia has already deployed some of the fund, leading the seed financing round of US$10 million to Signal 1 AI Inc., a Toronto-based artificial intelligence health startup.
Nijjar says it is the maturity of the Canadian startup ecosystem that helps him keep his head amid the broad economic turmoil. In the decade since venture capital has taken off in the country, founders have come from established firms to use their knowledge to develop sound business ideas, he said. Solid exits from larger companies mean some founders are starting on their second or third venture.
“You have companies like Shopify and Lightspeed go public and have become a global-category business. Those are all companies that have been very involved in the community over the last 10 to 15 years.”