Inovia Capital closes second growth fund on $450m

Partner Patrick Pichette told Unquote that the GP started raising Inovia Growth Fund II in autumn 2020 and that it took less than three months to raise the new fund, which exceeds its predecessor by $50m. Inovia Growth Fund held a final close in February 2019.

Companies backed by the first fund include Lightspeed, AppDirect, Sonder, Hopper, AlayaCare, WorkJam, Forward, Snapcommerce and Symend.  

No placement agents or advisers were used for the fundraise, which was carried out remotely.  

Inovia will use the new fund to grow its presence in the UK and Europe.

Inovia partners Chris Arsenault, Dennis Kavelman and Patrick Pichette committed 5-6% of their own capital to the new fund.

Investors
Pichette told Unquote that the performance of Inovia Growth Fund I made raising the new fund easy. "With Growth Fund I, investors thought 'OK, will you guys be able to do this?', and then three years later, with an IRR of 60%, and companies that have gone from being small to being on the New York Stock Exchange, when you go back to investors and say: 'We think we've proven we have tail winds to go after', everyone was at our doorstep. We were oversubscribed."

LPs included a mix of existing and new investors and featured small family offices and private investors, alongside institutional investors, who, Pichette said, loved to co-invest alongside the GP. "We have the advantage of being a small fund, but we can raise a quarter of a billion dollars because the pension funds wait for us to do all the homework, and then when we show up with a great opportunity, they say 'Can I jump in?', so we have the opportunity to go from $25m to $250m in a few days."

Many of the LPs are Canadian, but also include investors from the US and Europe. Investors include CDBQ, Kensington Capital, NorthLeaf, Bank of Montreal and Alberta Enterprise Corporation.  

Investments
Growth Fund II will invest in around 10-12 growth-stage companies and will focus on companies in Europe, in addition to Canadian and US operations. It will also target European companies seeking global expansion, especially to North America. The average size per investment is expected to be $30m, but Pichette said the GP would double down on some companies more than others. 

"Fund II is truly our first transatlantic fund. The first fund was about anchoring the relationships, and here in the UK and Europe specifically, it was about building our network. We have done a lot of work in the community to be known, and now that everything is in place, we have started to invest in Europe," said Pichette, who is a founding member of business mentorship organisation CDL Oxford, and a jury member of annual science event Falling Walls in Germany.

The fund will invest in technology-focused growth-stage companies in industries such as financial services, healthcare, commerce, the future of work, and travel.

The GP has already used the vehicle to invest in LA-based cycling app developer Zwift. The GP said that even though the company was headquartered in the US, its founder, core employees and board members were based in London.  

Headquartered in Canada, Inovia manages $1.5bn across early- and growth-stage funds, and has offices in Montreal, Toronto, Calgary, San Francisco and London. 

People
Inovia Capital – Chris Arsenault, Dennis Kavelman, Patrick Pichette (partners).

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