Inovia Capital has raised about $800 million (US$600 million) for a pair of early-stage and growth funds, fulfilling an ambition to become a full-stack venture firm.
The Montréal tech investor secured $266 million (US$200 million) for a fourth early-stage fund, meeting its target.
It also secured an initial $532 million (US$400 million) for a new growth-stage vehicle.
Inovia is now looking to raise up to US$100 million more for the growth fund, potentially increasing it to $665 million (US$500 million), General Partner Chris Arsenault told PE Hub Canada. He expects to wrap up fundraising later this year.
The funds were backed by new and existing limited partners, with roughly 90 percent of commitments coming from Canadian institutions and family offices, Arsenault said.
Disclosed investors include AEC, BDC Capital, Caisse de dépôt et placement du Québec, Fonds de solidarité FTQ, IQ, Kensington Capital Partners, National Bank, Northleaf Capital Partners, Royal Bank of Canada, Teralys Capital and Toronto–Dominion Bank.
Arsenault expects to tap a mix of Canadian and European LPs in a final close.
By raising substantial commitments for both vehicles, Inovia has effectively blended its decade-long focus on startups with an ability to do growth-equity deals – or what it calls full-stack investing.
The strategy, modeled after Silicon Valley VCs, will enable cross-spectrum investments in tech companies, helping to take them from inception to IPO and beyond.
The firm will write cheques for initial early-stage investing of US$1 million to US$10 million and initial growth-stage investing of US$20 million to US$30 million.
The funds will maintain Inovia’s longstanding focus, targeting applied services and infrastructure platforms geared to fintech, digital healthcare, e-commerce, transportation tech and travel tech opportunities.
“We’re pursuing a similar game plan with a similar operational mindset but on a far larger scale,” Arsenault said.
New London office
Inovia also announced the opening of an office in London, run by General Partner Patrick Pichette. Pichette, formerly a senior vice president and CFO at Google, was hired in 2018 to co-direct the firm’s growth-equity side.
The office is intended to help Canadian and U.S. companies gain or expand on a market presence in Europe. Inovia will also begin investing in European startups, initially in the U.K., with a parallel plan of giving them a North American beachhead.
Arsenault says the initiative could be a particular boon to scaling tech companies in Canada, which have before now lacked a well-resourced local partner with transatlantic capability.
“We’re backing tech entrepreneurs with big ambitions, and you can’t build a global company without having a global perspective and global reach,” he said.
The London location brings Inovia’s offices to five. Each has senior investment pros representing the early-stage and growth investment mandates.
The Montréal headquarters is led by Arsenault and Principal Magaly Charbonneau.
A Toronto office is led by General Partners Dennis Kavelman and Karamdeep Nijjar. Kavelman, formerly CFO and COO at Blackberry, was hired last year to direct growth-equity activity alongside Pichette.
The firm also has a presence in Calgary, overseen by General Partner Shawn Abbott.
In the U.S., Inovia invests from a San Francisco location led by Partner Todd Simpson and Principal Antoine Nivard.
Inovia is already sourcing deal flow for its two freshly capitalized funds and expects to soon announce inaugural investments for each, Arsenault said. It remains in hiring mode, with a focus on operational talent to support the portfolio.
Lightspeed’s public debut
Along with raising capital and expanding its geographic horizon, Inovia has a high-profile portfolio company that is getting ready to go public.
Lightspeed POS, a Montréal point-of-sale solution for retailers, restaurants and e-commerce businesses, filed a preliminary prospectus earlier this month for an IPO in Canada. It is reportedly seeking at least $200 million at a valuation of $1 billion-plus.
If successful, Lightspeed’s IPO will be the largest by a Canadian VC-backed tech company in two years.
Inovia was an early investor in Lightspeed’s transition from a service company to a product platform. It also joined the company’s US$166 million Series D financing in 2017.
(This story has been updated to identify additional investors in Inovia Capital’s funds.)