Montréal-based iNovia Capital has exceeded the target set for its fourth venture fund, thanks to a group of new and repeat limited partners that included many of the firm’s best known founders.
The fund, iNovia Investment Fund 2015 LP, secured $175 million in committed capital, iNovia Managing Partner Chris Arsenault told PE Hub Canada. That’s 17 percent more than its goal of $150 million.
The fund met with strong investor demand and could have raised much more, Arsenault said. However, GPs and LPs agreed to stop at $175 million to keep faith with iNovia’s long-standing market strategy, he said. The firm invests in startups operating in North America’s Internet, digital media and communications sectors.
A total of 20 institutional LPs participated in Fund IV’s close. They included Teralys Capital, which led commitments alongside Northleaf Capital Partners. They were joined by AVAC, BDC Capital, Caisse de dépôt et placement du Québec, HarbourVest Partners, Investissement Québec and Kensington Capital Partners. A dozen family offices also signed on.
Arsenault took special pride in the fact that a dozen founders of iNovia-backed portfolio companies also made commitments. They include Dax Dasilva, co-founder and CEO of Lightspeed, a point-of-sale software provider. Lightspeed accounted for last year’s largest VC financing in Canada and is widely seen as a strong candidate for public sale.
Other participating founders included Daniel Saks, co-founder and CEO of cloud services provider AppDirect, and Chris Sukornyk, founder and CEO of Chango, a digital media company acquired by Rubicon Project last April.
Another dozen entrepreneurs also invested, including Globalive Capital head Brice Scheschuk.
As part of Fund IV’s close, iNovia established special purpose vehicles, or side-car funds, to facilitate one-off investments by LPs interested in specific deal opportunities. These may include “category leaders” that are entering later stages of growth, Arsenault said.
The larger capital pool will allow iNovia to back portfolio companies with more substantial follow-on rounds, he said. It will also help compensate for a weaker Canadian dollar. This may prove crucial in cross-border financings and when iNovia-backed domestic startups are looking to expand into the United States.
Arsenault also wants to lend resources to portfolio companies that see a particular growth opportunity in strategic acquisitions.
“Canadian entrepreneurs are more ambitious and executing towards building bigger companies,” he said. “The additional capital will help us to support our category leaders to become the hunters, and not always be the hunted.”
Fund IV is iNovia’s largest to date, surpassing by almost 60 percent the $110 million secured by Fund III in 2011. It increases the firm’s total capital under management to $450 million.
With iNovia Investment Fund 2015’s close, Arsenault said he and his colleagues will begin to ramp up deal-making.
“Our successes with companies such as AppDirect and Lightspeed have created a significant amount of high quality deal flow,” he said. “We’re seeing more high-potential companies than ever before. The new fund will help us fuel their growth.”
This story first appeared in affiliate magazine Venture Capital Journal, which is published by Buyouts Insider. Subscribers can read the full story and by clicking here. To subscribe to VCJ, click here for the Marketplace.
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