Inovia raises $ 420 million to help start-ups overcome crisis

Montreal firm Inovia Capital announced Wednesday morning that it has raised $ 420 million to launch its fifth venture capital fund in 15 years. This new fund will target technology companies seeking pre-seed funding or Series A funding that will allow them to develop on-demand solutions that have the ability to transform industries that are slow to become digital.

The context in which the iNovia V Venture Capital Fund was born is reminiscent of the first months of the company’s activity. If the Montreal firm is now the largest investor in start-ups in Canada, it is because it has been able to reap the rewards of helping start-ups emerge in the long period of growth after the 2008 financial crisis, the worst in its kind since the Great Depression of 1929.

Magaly Charbonneau, a partner at Inovia, hopes to multiply her new fund, and despite the current context of economic uncertainty, the success it has experienced over the past fifteen years. “There is still a lot of available capital Get startedbut we’re seeing how public markets have evolved in recent months and we expect that to affect private investment, ”he fears.

US $ 1 billion in 18 months

However, the Montreal leader puts this impact into perspective, adding that companies with good capitalization – even those currently not making big profits – will have a way to achieve the “next two or three years “without much difficulty.

Certainly, there is no shortage of investment capital in Inovia, which has raised just over US $ 1 billion in three separate funds since the beginning of 2021. Thus, Inovia is targeting three stages in the life of new technology companies, where capital is essential to ensure the continuity of things: pre-seed, seed and business continuity.

Magaly Charbonneau is also pleased that a quarter of the investors involved in the iNovia V fund are new partners of her company, showing both the appeal of the Montreal and Canadian technology scene and the popularity her team has gained. manager. . “It took three weeks to complete this new round,” he said.

Inovia has already started using the money deposited in its latest envelope by providing assistance to two companies that are experiencing strong growth in their respective niches. The Montreal fund led a $ 13 million roundraising round for Get started Toronto -based Signal 1, which specializes in artificial intelligence applications to help healthcare professionals, among other things, prioritize patients. Inovia also participated in a $ 9.5 million investment in Flare, a Montreal -based cybersecurity company that caters to the corporate sector.

A good time to get started

With all this capital in hand, Inovia may worry that the pipeline of tech start-ups will dry up in the next few months, due to fears associated with the global economy caused by high inflation and a particular that volatile geopolitical situation. But this is not the case, Magaly Charbonneau assured.

“This may be the best time to launch your Get started “, he assures. The partner was not part of the Inovia Capital team when it was created in 2007, but he is already working in the technology sector. In fact, he not only experienced firsthand the effects on the techno scene of the 2008 financial crisis, but he also remembers the explosion of the techno bubble between 1999 and com‘”He recalled. However, it will take several years after the advent of the new millennium to regain certain enthusiasm — in Quebec at least — for new technologies.

No one knows what to do in the coming months. More mad investors are already lowering the role value of the start-ups they fund and are starting to demand a bit of anticipation that they can earn quickly, a sign that there is some cloud in the market. ng Get started.

There is still a lot of room for change in some industries, Magaly Charbonneau thinks. Especially in the niche where his company operates: it is constantly looking for on-demand software solutions (what the English call SaaS or “ software as a service ”) With the ability to accelerate the digital transition in sectors where it promises to improve the bottom line of companies large and small.

The world is changing, but not in Inovia. Its strategy for the next fifteen years is likely to remain the same as for the past fifteen years. “We are always looking for technologies that are ready to change industries on a global scale. »

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