First close brings Inovia two-thirds of the way to its $450-million target.
Montréal-headquartered venture capital (VC) firm Inovia Capital has announced that it has secured an initial $300 million USD for its third growth equity fund.
This brings Inovia two-thirds of the way to its $450-million target for Inovia Growth Fund III, led by returning limited partner (LP) Caisse de dépôt et placement du Québec (CDPQ). The news was first reported by Buyouts Insider and confirmed by Inovia in both a LinkedIn post and with BetaKit.
The strategy with Inovia Growth Fund III appears to remain consistent with Inovia’s prior growth equity funds.
Inovia closed its first growth fund in 2019 after raising $400 million and followed that up in 2021 by raising $450 million in early 2021 for Inovia Growth Fund II. The public launch of the full-stack software investor’s third growth fund comes just over three years after its second, amid a difficult fundraising environment for startups and VC firms alike.
With Inovia Growth Fund III, Inovia aims to help address and take advantage of the gap in Canada’s technology sector that it says exists at the growth-stage level.
“The Canadian tech ecosystem is extremely rich in opportunities but also in tech awareness,” Inovia partner Chris Arsenault told Buyouts Insider. “While it has matured over the past decade, building some major software businesses, it is underserved and undervalued on a capital basis, including at the growth stage.”
Inovia shared details about its third growth fund with BetaKit but declined to provide further comment on the news.
Across its different funds, Inovia invests in tech companies from early to growth-stage, while also supporting other VC funds. Inovia is one of Canada’s most active VC firms.
An Inovia spokesperson told BetaKit that Inovia launched Inovia Growth Fund III in January, closed $300 million this month, and aims to raise the remainder of the fund before this fall.
The spokesperson confirmed that in addition to CDPQ, Inovia Growth Fund III’s other LPs include returning investors Fonds de solidarité FTQ, the Business Development Bank of Canada, and Investissement Québec.
Returning LPs accounted for 80 percent of Inovia Growth Fund III’s initial commitments, which Inovia attributed to the VC firm’s distributions, claiming that in the past 36 months, it has returned $1.6 billion of fund and co-investment capital to LPs.
Inovia typically backs business-to-business and business-to-consumer software-as-a-service and marketplace tech startups with an eye toward themes like the future of work, travel and hospitality, commerce enablement, security, and digital health.
The strategy with Inovia Growth Fund III remains consistent with Inovia’s prior growth equity funds. The VC firm’s third growth fund will make first investments of $25 to $35 million into up to a dozen companies across North America and Europe.
Feature image courtesy Inovia.
