Georgian Partners Inc. has raised Canada’s first $1-billion-plus private-sector venture capital fund.
The Toronto late-stage financier has raised US$850-million ($1.1-billion) for its fifth fund, US$100-million more than it targeted when it informed the regulator about the offering in September, Georgian confirmed in a filing with the U.S. Securities Exchange on Tuesday. Georgian raised its US$550-million fourth fund less than two years ago. A Georgian spokesman declined to comment.
The firm – which specializes in funding later-stage technology startups seeking tens of millions of dollars in growth capital – has backed a number of Canada’s top startups, including Shopify Inc., Ritual Technologies Inc. and Tophatmonocle Corp. It typically ranks among the top quartile of North American venture funds in investment returns.
Several of its deals delivered solid returns after changing hands last year. Turnitin, an Oakland-based education technology firm, sold to media giant Advance Publications for nearly US$1.75-billion, or US$1-billion more than an investor group including Georgian paid in 2014. Two other Georgian-backed U.S. financial technology firms, Lender Performance Group LLC and Kony Inc., both sold to financial software companies last summer for more than US$500-million each. Meanwhile, Thoma Bravo LLC bought control of Cority Software Inc., a Toronto provider of software for performing environmental, health, safety and quality audits in a deal valuing the company at more than US$500-million.
Georgian closed its first $70-million fund in 2010, backing companies that developed data-driven analytical software tools for large enterprise customers. Georgian raised $200-million for its second fund in 2013 and US$375-million for its third in 2016, and now generally backs companies that apply artificial intelligence to solve business problems, as well as those that build technology for corporations to interact with customers through text and digital voice as digital-security-focused startups.
Georgian has set itself apart from other VC firms by establishing an “impact team” of seasoned executives that it parachutes into its portfolio companies and by creating software tools to help its companies in the AI sector by improving their ability to anonymize customer data and explain how their algorithms make decisions.
That has helped Georgian win the lead on a string of competitive deals south of the border, including a US$55-million financing last year by Columbus, Ohio-based dental benefits provider Beam Dental.
The recent Georgian fund is the latest in a slew of increasingly large venture funds in the flourishing Canadian venture capital sector, although they have been dwarfed by multibillion-dollar funds raised in the United States during the same period.
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Sean Silcoff