Newly formed Panache Ventures has announced the launch of its first fund and its initial closing of $25 million.
A Canada-wide early stage venture capital fund, Panache is a new VC formed by four former core members of 500 Startups Canada, which announced the termination of all future and follow-on investments in August of last year: Mike Cegelski (Managing Partner – Montreal), Patrick Lor (Managing Partner – Calgary), David
Dufresne (Partner – Montreal), Nicolas Bouchard (Associate – Montreal).
In just five months the team came together to create this new independent venture fund with plans to be one of the most active in Canada.
“When we made the decision to end the investment period of 500 Startups Canada, we took two or three weeks where everyone was disappointed by the outcome,” David Dufresne, Partner at Panache told MTLinTECH.
“But after that we regrouped and asked ourselves if we should go our separate ways, or instead build on what we had done with 500 Canada—come together to raise funding and start to build a portfolio. So we went back to the private investors we had, and most of them told us that if we started something new they would back us and support us. We also went back to the institutions with whom we were about to close with 500 Canada. Three of them basically said if we started something new they would fast track their diligence and support us as much as they could. We started fundraising back in September, put a plan together, started fundraising, and here we are now.”
Panache plans to be extremely active in the number of deals it will participate in, contributing smaller amounts and collaborating with many of Canada’s existing prominent VCs rather than competing with them.
“Our main difference is that we do a lot of small deals. It’s very likely we will be one of the most active funds in Canada for number of deals closed. We look at all sectors related to technology, so we’re somewhat sector-agnostic. We look for companies that can scale very quickly. Our main difference is that we do more deals, we write smaller checks, and we usually co-invest with all the usual suspects, like Real Ventures, Anges Quebec, etc. They don’t really see us as competitors because we write small checks and collaborate.”
“We’re going to be sector-agnostic, but we are seeing a lot of activity around artificial intelligence, cyber security, around crypto and blockchain. We’re developing a network and we’re going to be working with a lot of the top accelerators as well, such as FounderFuel, Creative Destruction Lab across Canada. Those will be some of the accelerators we’ll be working with to get to know founders and then be able to decide which ones we would maybe want to invest in.”
The entrepreneurial team is made up of experienced operators, a strong angel investor track record, years of institutional VC experience and a strong network in Canada, Silicon Valley, and worldwide. A new team member based in the Greater Toronto Area will also be announced soon.
“We are putting together the most active and best performing early-stage private venture fund in Canada, created with innovative concepts based on a large portfolio diversification thesis. Panache is here to improve the startup ecosystem thus increasing entrepreneurial successes across Canada,” said Managing Partner Mike Cegelski.
Panache intends to deploy this capital in over 140 startups over the next 4 years, focusing on pre-seed and seed-stage startups. The firm has already invested or committed to invest in 11 companies across Canada.
“We’re focusing on supporting the next generation of entrepreneurs. We’re investing in the top growth and innovation sectors including AI/ML, FinTech, Cybersecurity and Blockchain technologies,” said Managing Partner Patrick Lor.