Teralys Capital closes $375 million fund

It’s a good day for the Canadian startup scene.

Montreal’s Teralys Capital fund of funds today announced that is has closed a new $375 million fund. The oversubscribed fund was created under the Government of Canada’s Venture Capital Action Plan (VCAP) in collaboration with the Government of Québec.

According to Jacques Bernier, a managing partner at Teralys, the fund had offers from multiple private institutions that it ultimately couldn’t accept because of a hard cap set at $375 million. A third of the cash came from the governments of Canada and Quebec, while two-thirds came from private investors.

“It’s an interesting accomplishment because it’s the first of the VCAP fund of funds that reached that level of $375 million. It shows that the fund of funds model, in fact, works,” Bernier told MTLinTech. “We’re also very proud because we’re the only VCAP fund that’s been able to attract international money into the fund.”

Teralys Capital

Jacques Bernier

The list of contributors to the fund is vast. Canadian and international institutional investors such as Caisse de dépôt et placement du Québec, Fonds de solidarité FTQ, Investissement Québec, BDC Capital, Fondaction CSN, Fiera Capital, Lune Rouge, Bpifrance, National Bank of Canada, La Capitale, Desjardins Group and Consensus Business Group all took part. Two strategic corporations, OpenText and Knight Therapeutics, and three successful Montreal entrepreneurs also helped create the fund.

Teralys is now the largest innovation-focused investor in Canada managing over $1.6 billion in venture capital. It boasts over 600 companies within its portfolio.

Since its initial closing last year, Teralys Capital Innovation Fund has already completed 10 new fund investments and played a leadership role with venture capital managers such as Georgian Partners, iNovia Capital, McRock Capital, Information Venture Partners, White Star Capital, Persistence Capital Partners, Sofinnova Capital, Clarus Lifesciences and OpenText Enterprise Application Fund.

Teralys Capital Innovation Fund has also made five additional direct investments in leading Canadian technology companies including Zymeworks, Lightspeed, eSentire and Luxury Retreats.

“We’re all very proud of the new fund,” said Bernier. “It represents teamwork that’s been going on over the last 12 years. The real accomplishment is the change in the ecosystem we’ve seen over the last decade. Thats what were really proud of.”

The new fund should be great news for a great many entrepreneurs in Canada. It’s no secret that growing technology companies in Canada haven’t always been satisfied with the amount of capital it can access on its own soil. It’s often US investors who come in for the heavy lifting, something that could be changing with new funds like Teralys’s.

Bernier admitted that there’s still a problem keeping Canadian entrepreneurs in Canada. It’s always a challenge, said the investor, but things are changing.

“We’ve seen a change over the last 12 months. An example in Montreal is Lightspeed, who was able to raise $60 million locally.”

Still, he reminded MTLinTech that Quebec has been different than the rest of Canada for the past decade.

“There’s been a lot more money, locally. If you look at Quebec specifically, there are institutional investors with deep pockets who are willing to support Quebec entrepreneurs. You see that in Caisse de dépôt, Investissement Québec and Fonds de solidarité FTQ. In Ontario you see the same thing, with OMERS.”