Earlier this year we quietly closed our largest fund to date. With everything that was going on in the world, it didn’t feel right to shout about it. But as the companies we invest in start to make those investments public, we decided now was as good a time as any to share a little bit more about the focus of our latest fund.
At its heart, this is a US$750M transatlantic venture capital fund to back ambitious entrepreneurs building early stage, disruptive technology companies. Our primary focus areas for investment include insurtech/ fintech, healthtech, proptech and workplace technology, with the addition of logistics tech in Eurpoe. It doesn’t mean we won’t invest outside those areas, but these are where our centre of gravity lies.
We are focusing on companies based in the US, Canada, the UK and Europe raising Series A to C financing. As has always been the case, initial investments typically range between $5M to $25M, with the opportunity for follow-on investments as a company grows. There will be times when we will look at investments on either side of this range, but it gives founders a good steer as to what we are most interested in.
The launch of this fund represents the culmination of a lot of hard work over the last 18 months, building up our transatlantic capability. We opened our Silicon Valley office in January 2019, and our London office in March of the same year. I wrote in depth about the team here, if you’re interested to see the people behind the investments we make.
The power of collective impact
We’ve believed for a while that as successful startups increasingly meet the demand to ‘go global’ (current circumstances notwithstanding), so too must their investors. With this fund we are putting our money where our mouth is and offering the founders we back access to a single, unified team, committed to supporting their success across geographies.
These entrepreneurs are tackling some of the greatest challenges facing our world today, and we believe in the value of collective impact. This means facilitating connections between our own portfolio companies, our portfolio companies and OMERS, and the transatlantic network we have through our Partners and their teams. It also means backing businesses where we know we can bring value way beyond the cheque that we write.
Over the past decade or so there has been a shift within the business community to recognize the role that company purpose has in aligning employees and inevitably building a better, more successful business. As the multi-stage venture capital investment arm of one of Canada’s largest defined benefit pension plans, we too have an overarching purpose that drives everything we do, every day.
Although the focus for our business is squarely on backing innovative tech businesses, we do so knowing the success of the companies we invest in has a direct and meaningful impact on real people. There are half a million Canadians who benefit from an OMERS pension — people like firefighters, police officers, paramedics, and municipal workers. Knowing the work we do has the potential to impact the daily lives of so many people is what drives all of us.
Practical support for global scale
Despite the proven — and increasing — importance of the ability to scale globally, many startups aren’t well-equipped for successful global expansion and often find themselves thinking about it too late.
Funding is of course the obvious answer here. But beyond money, companies eyeing international growth also need 1) a deep understanding of localized product/market fit, 2) an understanding of the localized regulatory environments and 3) access to a network of partners to help them navigate all of the operational challenges that come with growth and expansion, from real estate to procurement to hiring and technology. With this fund, and this team, that is exactly what we offer.
Our companies can benefit directly from team members who have current, relevant experience with international growth. To get a flavour of what that looks like, it’s worth having a read of Jambu’s post on what he learned about international growth from his time at Uber.
Patient capital without a ‘growth at all costs’ mentality
Until the economic impact of COVID-19 started to hit, one of the biggest challenges of the venture space had been the prominence of over capitalized companies subsidizing growth and ignoring business fundamentals.
It’s more important now than ever to reiterate that at OMERS Ventures we’re not looking to just invest big and then cash out quickly — that’s not our strategy and it’s not our culture. From our founding, we have been focused on building long-term, sustainable businesses that are disrupting some of the biggest industries.
None of that has changed. We recognize what a difficult environment all businesses are facing right now. We know that raising capital in a world where people can’t meet face to face will be challenging. But it’s not impossible. We are confident that innovation will continue to drive our economies, and we want to be there to support businesses both today and in a post-COVID world.