Published On: Tue, Mar 16th, 2021

Inovia Capital raises $450M for second growth-stage investment fund

Montreal-headquartered Inovia Capital has lifted $450 million for Growth Fund II, a firm’s second growth-stage investment fund. The tighten of this appropriation comes usually a small over dual years after a proclamation of a initial in Feb 2019, a $400 million pool of investment collateral that remarkable Inovia’s initial incursion over a early theatre deals it creatively focused on.

Inovia now has investments opposite each theatre of a company’s expansion — including maintaining stakes in some of a portfolio companies that have had successful exits to a open markets, like Lightspeed, a point-of-sale and commerce association that went open in a scarcely $400 million open charity on both a NYSE and a TSX final year.

As with Growth Fund I, a idea of Growth Fund II is to deposit in companies with a concentration essentially on Canadian startups, yet also looking to targets in a U.S. and EU, where Inovia also maintains offices. The firms’ partners, including Chris Arsenault, Dennis Kavelman, and former Google CFO Patrick Pichette, have focused on building out a group of gifted operators to assistance their portfolio companies, and deposit privately in areas of sold need for startups outward a Valley, like sourcing high-demand, comparison talent with high-profile tech attention experience.

Inovia’s strange Growth Fund was formed on an arrogance that a organisation could precedence a relations and a knowledge to broach value to a portfolio companies not usually when they’re starting out, yet opposite their expansion cycles. Arsenault explained in an talk that Fund we was kind of a explanation indicate that that this arrogance was correct, that afterwards paid large dividends when a organisation went out to lift Fund II final year.

“We fundamentally built a group around Dennis, Patrick and myself,” he said. “We unequivocally followed by on a pivotal assumptions over because it finished clarity for Inovia to use a height to indeed build a expansion theatre account that would advantage not usually from insights into a portfolio, yet also all of a relations and a height that we built over a final decade.”

What indispensable proving, Arsenault said, was that Inovia could mount toe-to-toe with a growth-focused firms that had acted as follow-on investors for a early theatre deals over a years. That was no easy task, when we cruise that Inovia supposing understanding upsurge to some of a many reputable try firms in technology, including Bessemer, KKR, TA Ventures and Sequoia.

Inovia hired a lot of operators with knowledge during high-growth companies, and focused on being means to shepherd a investments by hurdles like building a genuine board, and engineering a top list to scrupulously conduct and ready delegate sales. With a devise to deposit in between 10 to 12 companies with a $400 million in Fund I, Inovia began creation deals – a initial was with Lightspeed, and afterwards they got into Forward (tech-enabled primary health care), Hopper and Snaptravel (two transport attention startups) and more.

Inovia Capital expansion partners Chris Arsenault, Dennis Kavelman and Patrick Pichette (left to right)

Most of a companies that Lightspeed picked with Fund we (it did 10 deals in total) finished adult carrying a really clever 2020 – including, surprisingly, all a travel-focused startups. Based on a strength of their performance, Arsenault and his partners motionless to accelerate their calendar for lifting Fund II, and found LPs some-more than willing. They finished adult capping a account during $450 million (with a aim of between 10 to 12 investments, as with Fund I) given what Arsenault says felt like a right distance for handling opposite a investment and handling team, notwithstanding accessible direct to expected lift utterly a bit more.

Arsenault remarkable that many of a LPs contributing to this account also had collateral in a first, yet some new investors have also sealed on. And while Inovia’s concentration is not particularly Canadian, he combined that a firm’s success, along with a makeup of a investment partners and portfolio (two-thirds of a companies it has corroborated are Canadian) tells a story of a changing investment landscape north of a border.

“The infancy of a LPs are Canadian, and we take it to heart that it’s critical to emanate patterns of success, so that people can demeanour towards models and possibly replicate or adjust to their possess situation,” Arsenault said. “I consider that we need some-more success stories that people can demeanour during and say, ‘I can do a same thing, or we can do better.’ And a fact that a LPs came behind with us, and when we demeanour at, we know, what Georgian [Partners] is doing, and what Novacap is doing, and what OMERS Growth – this is zero like a VC ecosystem and attention that we was in 10 years ago, right? We’re really on another turn now in Canada.”

He combined that there are examples during each theatre of company-building, citing a new Backbone Angels common led by a series of post and stream Shopify employees including Arati Sharma, Atless Clark, Lynsey Thornton and Alexandra Clark. Arsenault also forked to Lightspeed’s preference to list initial on a TSX before a NYSE as a pointer of newfound tech attention majority in a Canadian context.

Finally, Arsenault credits an surprising ‘X’ cause in how Inovia has been means to put together this second account and conduct low impasse in a really active portfolio companies over a final year: a mostly remote conditions brought on by a necessities of a pandemic.

“It would have been unfit to do what we did within a portfolio, with a portfolio, fundraising a new fund, generating a best year, in terms of exits final year, we had a New York Stock Exchange IPO for Lightspeed, we had a dozen exchange of acquisitions where a portfolio companies are doing a acquiring,” he said. “I don’t know how we would have finished what we’ve done, had we been roving and had a normal life.”

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