Fund News

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Georgian Partners raises $100M for second fund

Firm invests in "Applied Analytics", or companies that use analytics to strengthen their business

Innovation series by Steven Loeb
February 11, 2014 | Comments
Short URL: http://vator.tv/n/34fc

(Correction: article previously stated that Fund II was closed, but this is only its first close)

To the average person, all technology seems to be coming out Silicon Valley. And, yes, it is true that it is the epicenter, there is a lot going on outside that one tiny area on the San Francisco Bay.

We here at Vator have written about some of these other areas of the country that have become tech hubs, including AustinChicago and Boston, as well as some international cities as well, including London.

Perhaps we should add one more city to our list: Toronto.

Georgian Partners, a Toronto-based VC firm, has completed a first close of $100 million for its second fund it was announced on Tuesday.

The lead investor for the fund, called "Fund II," was Northleaf Venture Catalyst Fund (NVCF). Additional investors included BMO Financial Group, Kensington Capital Partners, Fondaction, family offices and a large strategic software investor.

The firm had previously raised a $70 million fund in July of 2010, called Georgian Partners Fund I. The company used the funding to make investments in companies such as 41st ParameterShopify,Dealfind, Kony and ScribbleLive.

The company focuses its investments on expansion stage Enterprise Software, Internet and Information companies. Specifically it looks at those in the "Applied Analytics," space, which Justin LaFayette, co-founder and managing director of Georgian Partners, described me as "business software companies that optimize outcomes in business processes they control."

The firm looks for companies using analytics to optimize their solutions, not just issuing reports on data, he said.. It is important for companies that the firm looks to invest in either already be doing this, or have it as a core part of their strategy.

So, for example, Shopify was using their analytics to make the experience better for their customers by automatically adjusting prices, and detecting fraud

"If we see two companies in the same space, and one thinks analytics strategy is important, and the other doesn't, the first company will be more attractive to us,"  said LaFayette.

"There were relatively few companies taking advantage of this when we started out. Few knew the inherent value in their data."

There are now a lot more companies that understand how to take advantage of their data but 'it is still early days."

The Toronto tech scene

LaFayette also spoke to me about what he sees as the strengths of the Toronto tech scene, which he admits is currently "under the radar," though he believes that is changing.

While Georgian Partners invests in companies all across North America, he pointed to the University of Waterloo, as well as companies such as Algorithmics, which was purchased by IBM in 2011, as well as the presence of BlackBerry as indications that the scene in getting stronger.

"We have a high percentage of business software and enterprise software companies," he said. "Toronto has the most headquarters in Canada."

Two issues that he believes are preventing the city from getting noticed are that the scene is "not as cohesive" because it has many other strong industries, and that enterprise software doesn’t get as much attention even if the company has $20 million to $50 million in revenue.

"From our point of view, Toronto is one of the top five tech scenes in North America."

Other 2014 funds

2014 may be young, but it has already seen a number of funding announcements.

In January, Earlybird Venture Capital announced the closing of its newest early-stage fund. It's called Earlybird's Digital East Fund, which for the first time in its 17-year history will be targeting Turkey and Central and Eastern Europe. 

The fund is some $110 million, with a target of $130 million. More than half of the funds will be used for follow-on capital.

The same month VC firm ff Venture Capital raised $52 million for two funds, ff Rose and its sister fund ff Rose Innovate, while early-stage venture capital firm Brooklyn Bridge Ventures raised $8.3 million for its second fund.  

Last week, VC firm Draper Fisher Jurvetson closed its early-stage-focused Fund XI on $325 million from a mix of existing and new investors into the fund, including the San Francisco Employees’ Retirement System.

(Image source: http://www.georgianpartners.com)


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