Kensington Capital Partners announced today its first four investments in the Kensington Venture Fund. Launched in November 2014 with an initial closing of investor commitments totaling $160 million, the Fund is part of the Government of Canada’s Venture Capital Action Plan (VCAP).
These new investments coincide with the resurgence in the Canadian tech sector. After witnessing declines in the oil and gas and mining and materials sectors, many Canadian investors are now looking to technology for growth.
“We are proud to work with the private sector to strengthen all levels of Canada’s venture capital ecosystem,” said Industry Minister James Moore. “Our collective ability to give Canadian entrepreneurs access to significant amounts of capital will create new jobs, help fund more innovative ideas, and ultimately enable Canadian technology firms to build globally competitive businesses on Canadian soil.”
Rick Nathan, Managing Director, Kensington Capital Partners, predicts this year will be even better. Citing an increasing number of new companies funded, new venture groups being formed along with incubators, accelerators and an active community of individual investors, Nathan says this will be a breakout year for Canadian technology companies.
“Over the past several years, Canada’s tech sector has seen very few companies achieve the scale and growth necessary for successful public offerings,” said Nathan. “However, the conditions are now ripe, the market is much healthier and more receptive to technology stories than it has been in the past. Last year saw a surge of IPOs in the U.S. and we anticipate 2015 will bring a wave of Canadian tech IPOs, proving that we have finally created a mature, well-developed market for emerging technology in Canada.”
Since the initial Fund announcement in November, dozens of start-ups and VC fund managers have come forward from across the country seeking funding. The initial four investments in the Kensington Venture Fund are:
1) Georgian Partners II: Invests in expansion stage Enterprise Software, Internet and Information companies that are exploiting Applied Analytics: the convergence of Cloud-based business solutions, Big Data, and broad information Rights. The fund’s notable portfolio companies include Shopify (Ottawa) and Vision Critical (Vancouver). (Toronto, ON.)
2) NOVACAP TMT IV: Focuses on later stage growth and established technology, media and telecom companies. (Montreal, QC.)
3) Blue Ant Media Inc.: Owns and operates 11 media brands across traditional and digital media platforms, including eight specialty cable channels, a YouTube multichannel network and live events. (Toronto, ON.)
4) Walden Venture Capital VIII: Targets Sprout Stage™ investments focused on digital media and cloud services. (San Francisco, CA.)
“We are proud to be able to access these very high quality investments for our Fund, which is, first and foremost, designed to achieve strong financial returns for our investors,” said Nathan, who is also a former Chair and President of CVCA, Canada’s Venture Capital and Private Equity Association. “The resurgent Canadian technology market should provide additional momentum to allow these companies to grow more quickly to achieve success. The selection of a leading Silicon Valley firm such as Walden provides our portfolio with a strong presence in that critical market, with important strategic value for our Fund as a whole.”
“Kensington consistently brings tremendous value and perspective to our boardroom discussions,” said Michael MacMillan, CEO of Blue Ant Media. “They have a long experience working with emerging companies such as ours and they know how to drive value. We look forward to working with Kensington as we continue to grow and build Blue Ant Media into a great success story.”
Investors in the Kensington Venture Fund include Richardson GMP, OpenText Corporation, Royal Bank of Canada, BMO Financial Group, CIBC, TD Bank Group, and Scotiabank as well as individual investors, all alongside the Government of Canada. The fund remains open to new accredited and institutional investors until it reaches its maximum size of $300 million.