Welcome to BetaKit’s startup stories of the week! Here, you will find the week’s most important news, features, and editorials published on BetaKit.
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TOP STORIES OF THE WEEK
In its first meeting of 2024, the Bank of Canada held the overnight interest rate at five percent, but governor Tiff Macklem signalled the central bank’s deliberations are “shifting” to discussing rate cuts.
This should be welcome news to Canadian tech. The record-breaking interest hiking cycle that began in 2022 contributed to plunging valuations, sloth-like deal flow, and an aching amount of layoffs. With interest rates unchanged (for now), I spoke to ecosystem insiders about what companies and investors should expect in 2024.
Here’s one take I saved just for subscribers to The BetaKit Newsletter, from Koho CEO Daniel Eberhard, who made news of his own this week.
“The dialogue in tech has been ‘just get to profitability’ and that, I think, is very crude advice,” Eberhard said, adding that investors do want to underwrite deals for quality companies with offramps of optionality or offramps to profitability.
“The markets are open for capital, which is clearly accelerating companies, and so I think that if you are not going to solve for profitability, you should solve for a believable pathway to profitability,” he said. “This is how we’re thinking about it at Koho … we will either be a profitable company or we will go back to the market with optionality, with the leverage of a company that could be profitable.”
If you’ve got any thoughts on profitability, survivability, or what’s to come in 2024, hit my line.
‘Til next week,
Bianca Bharti
Newsletter Editor
$135M CAD FOR WOMEN, CHILDREN-FOCUSED HEALTHTECH FUND
Toronto-based Cross-Border Impact Ventures (CBIV) has closed its first fund, securing over $90 million USD ($135 million CAD) in total commitments.
CBIV’s limited partners are betting that the firm can generate both quality returns and positive health outcomes. “The dirty secret, if you will, of impact investing is that everyone wants market returns and impact,” CBIV co-founder and managing partner Annie Thériault told BetaKit in an interview. “We’re not sacrificing one or the other.”
While CBIV officially announced Fund I in late 2021, the VC firm initially began fundraising for it a week before COVID-19 hit. The final close in November 2023 marked the end of a challenging journey that took longer than expected and saw the firm fall shy of its original target.
ARCTERN CLOSES $450M CAD IN THIRD CLIMATE FUND
ArcTern Fund III is more than double the size of its second fund, but like with CBIV, not as big as the firm’s original target. Co-founder and managing partner Murray McCaig said that Fund III will be a “rinse and repeat” of Fund II but on a larger scale, and see ArcTern back more Series A and Series B stage climate tech startups across North America and Europe.
A bevy of big-name institutional backers piled into the latest fund.
“They want to see you’ve been doing this for a while because experience matters,” said McCaig. “Now that we’ve reached that stage, we’re able to attract this capital. These are some of the biggest, smartest investors in the world, and it’s good to see they’re thinking about how to decarbonize and they see it as an investment opportunity.”
VINOD KHOSLA HEADLINES CIX 2024 INVESTMENT SUMMIT
Elevate is bringing back CIX this March after acquiring the conference last year. Headlining the gig is Vinod Khosla, co-founder of Sun Microsystems and founder of Khosla Ventures, which has invested in over 1,000 startups, including Canadian tech companies Deep Genomics and Blockstream.
Elevate said CIX 2024 will feature curated networking opportunities, including investor meetings, and will allow investors to connect and build their deal flow pipeline with access to more than 200 startups.
NEW NETWORK LAUNCHES FOR WOMEN’S HEALTH INNOVATION
Femtech Canada aims to support companies that cater to the health needs of women, girls, non-binary individuals, trans people, and those assigned female at birth. After just over two years of operating in stealth, Femtech Canada has now launched with over 120 Canadian startups, scale-ups, industry partners, investors, accelerators, and service providers in its network.
The organization was founded back in 2021 by Rachel Bartholemew, who is also the founder of Hyivy Health, which is developing a smart pelvic health rehabilitation system. Currently, Esplanade Ventures, Amplify Capital, and Wittington Ventures sit on Femtech Canada’s advisory board.
FUNDING | ACQUISITIONS | LAYOFFS
VAN – Skylab acquired by ImageQuix
VAN – Fantuan acquired Chowbus’ delivery business
VAN – Beatdapp – $22.9M CAD
ONT – TIAP and OBIO open $200,000 healthtech funding stream
TOR – Spellbook – $27M CAD
TOR – Cross-Border Impact Ventures – $135M CAD
TOR – Bagel Network – $4.18M CAD
TOR – ArcTern Ventures – $450M CAD
TOR – Nest Wealth acquired by Objectway Group
TOR – Emerge Commerce sells WholesalePet.com to Tiny for $12.5M CAD
MTL – Bello – $1.5M CAD
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Feature image by Rohan on Unsplash.
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