Des­marais-backed ven­ture cap­i­tal plat­form closes tech fund

The Guardian (Charlottetown) - - OBITUARIES / NEWS - BAR­BARA SHECTER

A ven­ture cap­i­tal plat­form with the back­ing of Que­bec’s Des­marais fam­ily has closed a sec­ond fund to fi­nance tech­nol­ogy star­tups pri­mar­ily in fi­nan­cial ser­vices, this time with $55 mil­lion to in­vest.

Fran­cois Lafor­tune, chief ex­ec­u­tive of Di­a­gram Ven­tures, said the first $30-mil­lion fund has al­ready in­vested in or co-founded five com­pa­nies since it launched in 2017 with a tar­get of seven in­vest­ments, and the plan is for the sec­ond fund to back about a dozen more.

The port­fo­lio com­pa­nies al­ready up and run­ning have grown to a com­bined en­ter­prise value of $175 mil­lion in less than three years, and have cre­ated 250 full-time jobs, Lafor­tune said, adding that the value is based in part on what third par­ties have been will­ing to in­vest in the com­pa­nies.

“We’ve proven that this is pos­si­ble, our model has a place,” he said.

The strat­egy is to find early-stage tech­nol­ogy com­pa­nies and part­ner with their man­age­ment fi­nan­cially, pro­vide sup­port ser­vices, and give them ac­cess to a network of lim­ited part­ners and large in­cum­bent play­ers within Power Corp.

Portag3, the ven­ture cap­i­tal arm of three com­pa­nies within the Des­marais fam­ily’s Power Corp., is the “an­chor” in­vestor in both Di­a­gram funds, the sec­ond of which salso boasts 75 an­gel in­vestors.

“They have a global view on the trends in fin­tech and it helps us be smart when we cre­ate com­pa­nies … to learn what’s hap­pen­ing glob­ally and to cre­ate the right type of com­pany,” said Lafor­tune.

“And also to val­i­date in­vestor ap­petite early, which we couldn’t do if we were just on our own.”

Paul Des­marais III, Di­a­gram’s co­founder and chair­man who is also a se­nior vice pres­i­dent at Power Corp., said the funds are a “key” com­po­nent of the fam­ily’s strat­egy of in­vest­ing in “the next gen­er­a­tion of global fi­nan­cial ser­vices plat­forms.”

Mil­lions of dol­lars in in­vest­ments have been made through Portag3 al­ready, in com­pa­nies in­clud­ing robo-ad­vi­sor Wealth­sim­ple, on­line lender Bor­row­ell, and Koho, a mo­bile pay­ments and bank­ing startup.

TYLER AN­DER­SON/NA­TIONAL POST

Fran­cois Lafor­tune, left, and Paul Des­marais III at Di­a­gram Ven­tures’ Toronto of­fices in 2017.

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