It’s hard to believe that only two years ago we embarked on our new phase of growth as an emerging VC with the launch of iNovia Fund III. That was December 2011, at time when we truly believed we were going as fast as we could, achieving crazy milestones, backing amazing entrepreneurs and feeling like part of the big leagues.
In hindsight, we realize we were just warming up. As excited as we were by our achievements then, we’ve been pleasantly surprised by the acceleration and fast pace of change. Things have continued speeding up as we meet even more exceptional entrepreneurs. Here are some of our most memorable milestones of 2013.
We completed 26 new investments in Fund III, backing amazing entrepreneurs in Montreal, Waterloo, Toronto, New York, Calgary, Edmonton, Vancouver and San Francisco. That’s 12 investments over the last 12 months, 9 of which were in Canada – one of the hottest places for tech investing right now! Many of our new portfolio companies have already moved into high-growth mode, including Vidyard, Lightspeed, Allocadia and others.
We exited from 7 companies over the last 2 years, including our fastest exit ever: BufferBox, a Waterloo based eCommerce infrastructure company out of our Fund III portfolio that was acquired by Google. The sale of Vizu to Nielsen, Babble to Disney and Milewise to Yahoo! have helped us build new and stronger relationships with key industry partners.
Failures also continue to teach us, and remind us that as strong as an opportunity looks like from the outside, it remains fragile and dependent of many factors not under the control of Management, the Board or investors.
There is always a lot to learn from exiting an investment. And clearly, alignment between founders, board members and investors is more of an art than a science. Timing is everything. And momentum can dissipate extremely fast.
We were shocked to see the valuation for pure eCommerce companies rapidly go down from a 4-6x revenue, down to a valuation multiple of 1-2x revenue. Simultaneously, the wearable technology space started warming up and companies with prototypes were getting “out of this world” valuations for un-proven technologies and unproven markets. We are excited about our investment in Basis – the world’s most advance health tracker, which is gathering the best industry ratings out there.
When discussing management changes and performance, many tend to forget that an emerging VC Fund is no different than a startup. We constantly re-evaluate ourselves, review our performance, assess our priorities and build on our strengths. Since announcing Fund III, we had our friend and colleague John Elton leave the fund and join one of our most active co-investors, Greycroft. David Nault and Antoine Nivard joined the investment team and Kylie Toh and Delia Pettit joined our marketing and admin teams.
Pat Lor, an iNovia Venture Partner and Entrepreneur in Residence successfully launch his second company – Dissolve to which we partnered up as investors. And Ray Muzyka joined the team as a Venture Advisor, reviewing opportunities, providing unique insight and co-investing along side us.
Management is the heart beat and emotional stimulus for any company. Being able to attract the best, maintain motivation and drive everyone towards achieving tangible milestones is critical for success. The same applies to VC funds.
Our funds are reasonably small ($110M was the size of both Fund II and Fund III), so as a consequence, we have limited resources. Over the years we heavily invested into our Venture Partner Network and Entrepreneurs in Residence (EiRs), simply because of the net positive impact these people have had on our portfolio companies. Chango, one of our fastest growing portfolio companies was introduced to us by Pat Lor, and EiR Chris Dingle served as their COO for over a year.
Over the last year we increased our reach and ability to provide value to our portfolio companies by planning and coordinating a series of targeted events such as: a CEO Summit in New York (attended by 31 Founders/ CEOs); a Marketing Summit in Toronto (where over 20 marketing executives gathered to share insights and experiences); our AGMs and a series of CIO/CTO Dinners addressing challenges attracting the best talent and resources to the company. We’ll be doubling up our efforts in 2014 to enable more interactions and sharing between portfolio companies.
All in all, we recognize that we’re a pretty lucky bunch. We get to work with passionate and driven entrepreneurs who want to have an impact, change the world in their own way, build value and have fun doing it. Plus, we are fortunate to have committed Limited Partners who are aligned with our long-term vision.
Our combined portfolio of companies now employs over 2,000 people and generates over $600M in combined revenue, up from $300M in 2011. And those results come from a portfolio where over 50% were pre-revenue at our initial investment.
We have come a long way, and as much as we are impressed by what our portfolio companies have achieved to date, we have a feeling that 2014 will be much faster and crazier than ever before.
We’re looking forward to working with the amazing entrepreneurs we’ve backed to date and seeing what we can help them accomplish next!
–The iNovia Team