Vancouver-based Top Down Ventures has completed the first close of its $25-million USD ($34-million CAD) Founders Fund I, raising $10 million USD for the venture studio to invest in early-stage software startups.
Top Down managing partner Joel Abramson told BetaKit this is technically the firm’s second fund. Its first fund, Top Down Capital, which was made up of internal capital, has deployed $20 million USD into 12 companies since 2018.
“Our capital, SaaS playbook, and venture studio combined with our global network, provide an unparalleled force multiplier for SaaS startups.”
Founders Fund I will target software-as-a-service (SaaS) companies that operate in the managed service provider (MSP) sector. An MSP is a third-party company that takes on a range of outsourced tasks and functions for another company, such as IT, marketing, or human resources.
Top Down, founded in 2018, is led by founder and chairman Chris Day, as well as managing partners Abramson and Mark Scott.
The trio have a long history of founding businesses in the MSP space together. According to their LinkedIn pages, all three were once leaders at Fully Managed, an MSP specializing in digital transformation that was acquired by Telus in 2022.
Day is also the CEO of ScalePad, which provides data tools for MSPs and where Abramson also serves as a board member. Abramson and Scott also co-founded Produce8, a work analytics platform that closed $6 million CAD in seed funding two years ago.
The new fund will target companies generating at least $1 million in annual recurring revenue between the seed and Series A stages. The firm will cut cheques of up to $3 million to a maximum of 10 companies. One-fifth of the fund is being reserved for follow-on investments.
Top Down says it uses a venture studio model, providing startups with operational expertise and a playbook for growth in addition to capital. The firm has a network of limited partners and operating advisors to help companies, which includes ScalePad strategic advisor Dan Wensley, Produce8 COO Janice Siddons, and Barclays’ head of investment banking Ryan Voegeli. Top Down said this model allows it to provide expertise in product development, go-to-market strategies, and team building.
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“We’ve been at the forefront of several firsts in the MSP industry, and this fund is the next one,” Scott said in a statement. “Our capital, SaaS playbook, and venture studio combined with our global network, provide an unparalleled force multiplier for SaaS startups in an industry that’s on track to reach $1 trillion by 2030.”
Abramson declined to disclose limited partners in this first close to BetaKit, but noted that MSP founders and executives make up over half of the investors. While the fund has no specific allocation for Canada, 90 percent of its investments since 2018 have been into Canadian companies, according to Abramson.
Top Down is looking to expand its geographic focus with the latest fund, however, with Abramson noting that two-thirds of the fund’s first three investments are in US companies, adding that the firm is also open to investing in Europe and Oceania through its current fund.
Top Down lists a dozen MSPs in its portfolio, including Vancouver-based startups Backup Radar, Quoter, and most recently, Benji Pays.
Abramson said the firm anticipates closing three new SaaS investments in the fourth quarter totalling $3.5 million USD. Top Down plans to hold the fund’s final close in 2025.
Feature image courtesy Unsplash. Photo by Priscilla Du Preez.
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