Growth Fund II: Meeting the Demand for Value-Added Partnerships

Helping founders with the talent, capital and mentorship they need to scale globally

Today, the Inovia team is proud to announce the closing of our US$450M second growth-stage fund, Inovia Growth Fund II, which builds on the success of our full-stack, operator-led model. This second fund signals our continued commitment to developing the tech ecosystem in Canada and Europe, one that supports founders well beyond capital. Across our growth and early-stage funds, we now manage over US$1.5B in capital.

In early 2019, we announced our first growth-stage fund — a US $400M fund. Growth Fund I (GFI) was built on the premise that Canada and the EU’s tech ecosystems had matured, and that many entrepreneurs — including ones that our early stage funds had invested in — now aspired to build world class companies from their home turf. Until recently, it was difficult for Canadian companies to attract both talent and capital for the growth stages of their life cycle, as a consequence many CEOs chose to sell early, typically to larger US companies.

With GFI, Inovia could provide the capital, mentorship and talent to support founders and their companies not only to scale globally but also to retain control and leadership through the subsequent stages of growth. With this support, the goal of executing an IPO, rather than an early sale, was more realistic.

We raised our second growth fund on the strength of the achievements of the first and are proud of this milestone: it confirms our thesis and enables us to further continue to partner with ambitious founders building category-leading companies.

However, the part of the story that I want to share with you today is why we believe we could do this so soon after the first growth fund and what it means for future growth in our ecosystem.

Building on the Momentum

Founders recognize that to go global, they need capital to invest in product development, talent acquisition and infrastructure. They also need guidance on growth activities such as market expansion, product strategy, mergers and acquisitions, and talent management.

We saw this play out in real-time with the companies in our first growth fund — Lightspeed (NYSE:LSPD), Sonder, AlayaCare, Symend, Hopper, AppDirect, Forward, WorkJam, and Snapcommerce — some have already scaled to thousands of employees, hundreds of millions in revenue, built their M&A strategies, and established operations across North America, Europe, and Australia. We stepped in with capital, but we also leveraged our incredible team of hands-on operators to guide these ambitious founders through their scaling challenges.

Talent is always a key focus for us. At Inovia, we look for two key attributes in our founders — a sense of common purpose with the type of companies we and they want to build, and a deep commitment to diversity and inclusion. To this end, we are including D&I clauses in our term sheets, encouraging dialogue about the Great Board Commitment, sharing thoughts with our founders about Why the Boardlist Matters to Us, and To You, implementing our Remote Talent Program in Canada, and accomplishing the build-out of a portfolio talent acquisition program.

We know that Canadian and EU success stories are critical to inspire up and coming founders to dream bigger. Lightspeed’s CEO, Dax Dasilva, started his company with a robust and clear vision — “to help ignite small businesses around the world.” In 2019, that vision became a reality when the company went public and celebrated being one of the three largest tech IPOs in the Toronto Stock Exchange’s history. This IPO, a series of acquisitions, and its subsequent listing on the New York Stock Exchange last year helped fuel Lightspeed’s organic growth. Today, the company has over 115,000 customer locations, US$29B in gross transaction volume, thousands of employees worldwide, and is headquartered in Montreal.

“Lightspeed is fortunate to have an incredible investment partner in Inovia. We first found strong alignment between our values — they understood our business and saw the potential for global growth, believing in Lightspeed’s role in shaping the landscape of omnichannel commerce.

As our first Canadian investor, they were supportive partners at every step of our journey; from startup to publicly traded company. Their support also brought significant Canadian investors to the table.

Inovia looks to invest in tech founders with global ambitions — I’ve always believed in our product and technology and the potential it had to impact the future of commerce on a global scale. In the eight years that we’ve been working together, Lightspeed has rapidly increased our footprint with omnichannel customers around the world, and staff across North America, Europe and Australia.”

— Dax Dasilva, Founder & CEO, Lightspeed

And as we look across the Growth Fund I portfolio, we see similar ambitions, although at different stages in their journey. Here are a few illustrative examples:

• San Francisco-based Sonder, founded in Montreal, announced an international growth centre that will create 700 jobs in Canada alone by 2025 and expand its operations in numerous countries.
• Montreal-based WorkJam, a digital workplace platform for organizations with frontline and hourly employees, fosters a unified employee experience globally amidst a new era of the future of work.
• Recently, Calgary based Symend announced their Series B, one of the largest of its kind in Alberta history, to support its vision to take their digital customer engagement platform global.

The same could have been said of Snapcommerce or Hopper. All of these are stories of global ambitions and they bring confidence to other founders in the ecosystem, to think big.

“Inovia has been an invaluable investor and advisor to Symend. They consistently lived up to their vision as we raised our Series B amidst COVID and continued their support through our B+ extension. The experience and insight the team brings has been instrumental in the accelerated growth of our business from 50 to over 250 Symenders in the past year and enabled our rapid expansion to serve the Asia-Pacific (APAC) market, Latin America (LATAM), and plans for Europe, Middle East and Africa (EMEA). I am proud to be a part of the Inovia family.”

— Tiffany Kaminsky, Co-Founder & CMO, Symend

Finally, growing massive companies is so much more than chasing valuations and exits. When we focus on building companies for the long-term, we create a supportive and robust ecosystem with the capital, knowledge, management experience, and competence to bring startups and scale-ups to the next level. We raise their aspirations from setting up a company to be acquired quickly, and a short term exit, to one that is shaping its industry, becoming the acquirer.

AlayaCare is an investment we first made through our venture fund and exemplifies what it means to combine organic growth and gain market share through acquisitions. The company, which recently completed its third acquisition, is fully supported by our growth team and our “acquirer mindset” playbook. Today, 500+ companies across the globe rely on AlayaCare to run their home care business.

As we look forward to Growth Fund II, we are eager to build on the momentum in the ecosystem, evolve our model to further support our founders and attract the best talent to guide our partner-entrepreneurs to their next stage of growth.

“Working with the Inovia team through the ravages of the pandemic has been nothing short of extraordinary. They stepped up to lead our Series E at a moment when the travel industry was on its heels, demonstrating with actions — not words — that they are in it for the long run, through thick and thin. A year later, we’re back on the offense with explosive growth on the horizon, which will be supported by hundreds of new jobs in Montreal, the result of a partnership with the Quebec government that Inovia helped craft.”

— Francis Davidson, Co-founder & CEO, Sonder

Looking to the Future: Our Canadian Roots and Global Ambitions

While we operate globally with a distributed team in three Canadian cities, the Bay area, and in London, UK, our True North finds itself in our Canadian roots. Our values, beliefs and guiding principles keep us anchored and focused in our efforts. We believe that there has never been a better time to embrace our unique Canadian DNA to build and scale global technology companies in Canada and Europe.

We care about supporting our local entrepreneurs. We are committed and believe that Canada has become increasingly attractive as a core business base for globally-minded companies. A great example of this is portfolio company, AppDirect — an investment we first made through our venture fund over nine years ago and more recently with GF1. Founded by two Canadians and headquartered in San Francisco, the company has recognized the benefits of our Canadian workforce, and now has offices in Montreal and Calgary with over 800 employees worldwide. Today, AppDirect powers millions of subscriptions worldwide for organizations like Jaguar Land Rover, ADP, and Comcast.

Finally, it goes without saying that none of our work would be possible without the trust and support of our Limited Partners, many of which are important Canadian institutions, that share our vision, and join us to actively support our company builders and our flourishing tech ecosystems. Together, we are funding and building a generation of global technology success stories, deepening the Canadian high-tech industrial base, definitively showing that Canada is a great place to invest and grow, and validating the wisdom of LPs that are choosing to improve their returns by seeking capital allocations in this sector.

These positive signals in our ecosystem can only mean one thing: the time to build the next generation of growth-stage companies is now. Carpe Diem!