Northleaf Venture Catalyst Fund commits $10M to early-stage IT fund

Northleaf Venture Catalyst Fund (NVCF) announced last week that it has made a $10 million commitment to Vancouver-based Version One Ventures II, an early-stage fund which invests in North American consumer Internet, SaaS and mobile companies.

Version One Ventures invests primarily in seed and Series A rounds, with investments ranging from $500,000 to $1 million per company. The Fund primarily invests in companies with marketplace, platform and SaaS offerings that address large capital markets ($100 million+).

“We are pleased to be an anchor institutional investor in one of Canada’s most promising venture capital (VC) funds,” said Ian Carew, Director of Northleaf Capital Partners. “The investment in Version One furthers NVCF’s strategy of investing in best-in-class Canada-based venture capital and growth equity funds.”

In Budget 2012, the Government of Canada indicated its intentions to stimulate increased VC investment in early-stage firms by announcing a $400 million Venture Capital Action Plan. The NVCF, the first VC fund of funds established under the plan, was subsequently launched in January 2014 in collaboration with the Government of Ontario with an initial closing of $217.5 million in commitments.

The new Fund invests primarily in Canadian early-stage and mid-stage VC funds, as well as directly in Canadian companies, and is managed by Northleaf Capital Partners.

Last month, NVCG also participated in a $14 million Series C investment round for Cambridge, Ontario-based eSentire Inc. The company offers active threat protection solutions and managed security services. The round was led by Georgian Partners, with participation from NVCF, Edison Partners and Ventures Link.

Another recent investment by NVCG was a $10 million commitment in June to leading global healthcare VC manager Versant Ventures.

Last year, new venture capital investment in Canada reached a six-year peak with $2 billion invested, according to data released by Canada’s Venture Capital & Private Equity Association (CVCA) in partnership with Thomson Reuters. Of note, average deal size grew from $3.3 million in 2012 to $4.3 million in 2013.

On a sectoral basis, the information technology sector continued to attract the highest levels of investment with $1.1 billion secured. This represents 54% of all investments, as well as a 19% year-over-year growth. In addition, e-commerce companies raised more funds within the sector than software developers.

Other sectors which performed well in 2013 were cleantech and alternative energy, as well as biotech and life sciences.

In spring 2014, The Funding Portal became registered by Ontario, Alberta and other provincial securities commissions as Canada’s first exempt market dealer (EMD) portal able to assist companies to secure both government funding and private capital. At the heart of this new EMD enabling platform is the portal’s MyFundCard™, which connects businesses seeking financing with dealers, private sector investors, government funders, and commercialization partners.

More than 20,700 organizations have now registered on the portal. Create your profile today to qualify for matches among Canada’s premiere online funding network.

FundingAwards – Who got Funded – Week of Oct. 20

Overall Disbursements: Funding from federal and provincial governments drops to $17.5M this week, compared to $196.4M last week.

Top Sector: Agriculture and Agri-Food is the top sector this week, attracting $9.8M, 56% of the total amount disbursed.

Top Region: Alberta is the top province this week, attracting 39% of the total amount disbursed.

Top Recipients in Ontario: 

  • Industry: No new awards this week.
  • Hospitals, Universities, Research Centres & Industry Associations: No new awards this week.
  • Charities, Non-Profits & Public Sector: Médecins sans Frontières and the Red Cross receive $1 million and $2 million each from the Government of Ontario to help front-line responders contain the Ebola outbreak in West Africa and is encouraging the public to match the donation.
    The Catholic Family Services of Peel-Dufferin receives $249,195 from Justica Canada to develop a Child and Youth Advocacy Centre (CYAC) in the Peel Region.

Funding Disbursed by Industry Sector:

sectors28

Funding Disbursed by Province:pros28

Active Funding Programs this Week:

  • Access to Justice in Both Official Languages Support Fund
  • AgriInnovation Program
  • Canada Cultural Spaces Fund
  • Community Dike Initiative
  • Development of Official-Language Communities Program
  • International Business Development Agreement
  • Ontario Libraries Capacity Fund
  • Participant Funding Program
  • Quebec Economic Development Program
  • Recreational Fisheries Conservation Partnerships Program
  • Victims Fund.

To receive daily reports on which organizations received funding in Canada, subscribe to The Funding Portal’s FundingAwards™ service.

Canadian Private Financing and M&A News Roundup – Week of Oct. 20

  • Cleantech
    • Construction has begun on the Armow Wind power project in Ontario. Samsung Renewable Energy, Inc. and Pattern Energy Group LP completed a C$580M construction and term loan financing, which was secured with 10 financial institutions. Located in the Township of Kincardine, the 180 megawatt (MW) Armow Wind power project will utilize more than 200 Ontario workers and Ontario-made products, including 91 wind turbine towers made in Windsor and 273 blades manufactured in Tillsonburg.
    • Cycle Capital Management signed an agreement with Qingdao City Construction Investment Group. In collaboration with Cycle Capital Fund III, this Chinese partner will invest in companies in the cleantech sector. In counterpart, Cycle Capital will support its Chinese partner in setting up a venture capital fund in Qingdao.
    • SPARQ Systems announced $11M in funding led by ArcTern Ventures, a VC fund that provides early-stage capital to companies in the cleantech sector. A MaRS Cleantech client, SPARQ Systems’ technology converts power produced from solar panels into electricity that can be used by the grid.
  • Finance
    • The Appraisal Institute of Canada (AIC) announced that it is among the leading professional valuation associations from around the world to sign a landmark Memorandum of Understanding with the International Valuation Standards Council. This memorandum demonstrates AIC’s support of the adoption of international valuation standards to ensure consistency in the valuation process across global markets.
  • Tech
    • Northleaf Venture Catalyst Fund made a $10M commitment to Vancouver-based Version One Ventures II, an early-stage fund investing in high-potential Internet, SaaS and mobile entrepreneurs throughout North America.
    • Vancouver-based Jostle Corp. secured a $2M equity investment to accelerate customer acquisition and improve its products. Founded in 2009, Jostle is a provider of intranet software that helps enterprises better engage their workforce.
    • Montreal-based LightSpeed acquired Belgium-based mobile hospitality POS company POSIOS.
    • Retailcommon, a Toronto based social shopping network, raised $2M in Series A financing.
    • Montreal-based MFive Labs‘ Listn music app was acquired by Beatport.
    • Toronto-based fypio raised $650K in angel investment. fypio is the smart and fun way to discover, collect and share your perfect home.
    • Toronto-based Retailcommon raised a $2M Series A round. The company offers an online software platform that enables any business to instantly create and distribute promotional and advertising content to generate traffic, increase sales and build customer engagement.

FundingSources – Must Reads

This week’s Must Reads from Funding Agencies and Industry Associations

  • BDC: BDC published its monthly economic letter.
  • EDC: A new global economic forecast by Export Development Canada (EDC) predicts that the momentum of the nascent U.S. recovery will be the key driver of the next global growth cycle. “U.S. consumers and businesses are back, and this is already translating into solid Canadian export growth. Others aren’t far behind. U.S. growth will translate into higher activity in other OECD economies and in emerging markets,” said Peter Hall, Chief Economist for EDC. “The driver is the U.S., and it is well-positioned to power up economies that are in gear. It’s all happening quickly, so for Canadian companies active in trade, or even considering it, it’s crucial for them to ensure they’re in gear too.”
  • Employment and Social Development Canada: Employers in British Columbia can now apply for the Canada Job Grant, an innovative, employer-driven approach to help Canadians gain the skills they need for available jobs.
  • Industry Canada: The Small Business Branch of Industry Canada released the Determinants of Entrepreneurship in Canada: State of Knowledge. This web-based resource applies the OECD Indicators of Entrepreneurial Determinants to the Canadian context; putting in one place information on factors that impact Canadian SMEs. It is designed as a guide for anyone interested in entrepreneurship in Canada.
  • Industry Canada: BizPaL was launched in the city of Duncan, BC. This free online application is a directory of the permits and licences required to start or run a business.
  • Notman House: Montreal’s Notman House has joined Google’s Tech Hub Network for Entrepreneurs.
  • OCE: OCE published its 2013-2014 Annual Report.

QP Briefing: Premier’s trip to China big part of government’s overseas economic push

By Geoff Zochodne

The premier’s trip to China this week is the government’s flagship initiative in a broader grab for global markets, a push that’s being welcomed with open arms by the province’s finance minister.

Finance Minister Charles Sousa said Monday that the Liberal government is building on Ontario’s status as the leading jurisdiction in North America for foreign direct investment with overtures like the China trip.

“The growth is in Asia, and South America, and it’s incumbent upon us to go out and seek greater relationships, so that’s what we’re doing. I’m very pleased by the initiatives thus far,” said Sousa.

Sousa has noted repeatedly in recent months that Ontario’s tax regime and attractive business climate have helped the province become the top destination in North America for direct foreign investment – topping Texas and California last year.

Ontario is still mired in deficit, which will hit $12.5 billion this year. While the government is seeking to constrain spending, it’s also attempting to boost its revenues. Along with infrastructure investment and improving retirement security, finding and helping the province’s businesses compete and find investment abroad is part of the government’s economic plan.

Premier Kathleen Wynne and Cabinet ministers Brad Duguid and Michael Chan are in China until Nov. 1 for the trade junket. Annual trade between Ontario and China reached $73 billion in 2013.

Sousa wants to see more Ontario trade outside of the U.S. to help diversify the province’s economy, which currently does only about five per cent of its trade with Asia.

“Part of our strategy to grow the economy is not only stimulating our investments in the local economy, but it’s also about expanding our reach beyond just the United States and that’s what’s happening right now,” Sousa said.

The news from the China trip is good thus far. The tour began in Nanjing, where several investments were announced. A press release touted several deals that have been negotiated, like a $20-million investment for a new steel-nail manufacturing plant in Kitchener and a $40-million investment in Ontario’s medical sector.

Nanjing is the capital city of Jiangsu, which also happens to be Ontario’s sister province. During her time there, Wynne helped ink a new work plan for the Ontario-Jiangsu Business Council, which is to help the two provinces with their economic collaborations.

Also while in China, Canadian Solar Solutions Inc. announced it had landed an investment of $70 million to build solar-powered technology, creating 100 new manufacturing jobs in Ontario. The government has been looking to market its green technology overseas, and 60 or so firms have joined the premier in China.

Guelph-based Canadian Solar was founded in 2001 and has sold more than $1.6 billion in solar technology worldwide. It opened a new plant in London in March that will employ 200 people and produce up to 220 solar panels a day for Samsung.

“Today’s signings build on the longstanding relationship between Ontario and China as economic, innovation and educational partners,” said Duguid, the economic development minister, in a statement. “This important relationship is creating economic opportunities leading to job creation and a better quality of life for people in both jurisdictions.”

Asked if the government will plan more trips abroad to facilitate trade, Sousa said “that’s the intent.”

Sousa also noted the province can rely on “a great diaspora,” particularly in the Greater Toronto and Hamilton Area, to help with overseas expansion.

“They have enabled us to build on some of those relationships, to continue to expand our growth,” the finance minister said. “I’m very pleased by the developments thus far.”

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Ontario angel groups receive funding to attract more investors

The Southwestern Ontario Angel Group (SWOAG) and the Angel One Investor Network each received $500,000 from the federal government last week to help expand their membership, increase their pools of investment funds, and provide mentoring support for early-stage companies in Southern Ontario.

Both organizations will receive funding in the form of non-repayable contributions from FedDev Ontario’s Investing in Business Innovation Initiative.

Based in Burlington, the Angel One Investor Network will use the funding to double its membership. Over the next five years, the Network’s members are expected to invest $15 million in private capital to about 50 companies. The funding will also be used to help companies prepare for investments, complete due diligence, and to develop tools and strategies that improve the process of angel investing.

Angel One Investor Network has previously received an additional $150,000 grant from FedDev, which allowed it to grow its membership from 12 to 110 registered accredited investors. To date, these members have invested more than $12 million in 43 companies. This increased activity has propelled the Angel One Investor Network to the position of leading angel group in terms of number of investments in 2013, according to the National Angel Capital Organization’s (NACO) Report on Angel Investing Activity in Canada.

Based in London, SWOAG also received funding to increase its membership from 65 to 115 members. This is expected to help an additional 40 companies secure more than $10 million in angel investment over the next five years. To date, SWOAG has made 28 investments in 13 companies for a total of $9.3 million invested.

The organization will also use the grant to support its outreach activities, develop educational tools and seminars, and improve reporting and monitoring systems.

According to NACO’s 2013 Report on Angel Investing Activity in Canada, 29 angel groups representing more than 2,100 accredited investors made 199 investments in 2013, resulting in a total investment of $89 million. The top three sectors to receive funding were information and communication technology ($28.8 million), life sciences ($20.5 million), and cleantech ($7.5 million).

In spring 2014, The Funding Portal became registered by Ontario, Alberta and other provincial securities commissions as Canada’s first exempt market dealer (EMD) portal able to assist companies to secure both government funding and private capital. At the heart of this new EMD enabling platform is the portal’s MyFundCard™, which allows businesses seeking financing to connect with dealers, accredited investors, government funders, and commercialization partners.

More than 20,700 have now registered on the portal. Create your profile today to qualify for matches among Canada’s premiere online funding network.