Montréal has a new healthtech venture capital (VC) firm on the block, backed by a Québec government fund that targets pre-seed investments.
The Eurêka investment fund, funded by Québec’s Ministry of Economy, Innovation and Energy (MEIE) and administered by Investissement Québec (IQ), has doled out $5 million to Glen Ventures, an early-stage healthtech fund with ties to the McGill University Health Centre (MUHC).
“Québec’s early-stage VC landscape is largely generalist or deep-tech-focused, leaving a gap for pre-seed healthtech startups.”
Michael Goodman
The firm told BetaKit that Eurêka’s support is a standalone co-investment mandate and not part of a larger fund. Glen Ventures currently invests in companies through special purpose vehicles (SPVs), but stated it has plans to raise a dedicated fund in the new year.
Across the board, it targets pre-seed and seed-stage companies, writing cheques ranging from $250,000 to $1 million with reserved capital for extensions.
“This approach allows us to begin investing right away, building our track record and positioning ourselves effectively for the future fund while adapting to the market,” Glen Ventures co-founder Michael Goodman wrote in an email to BetaKit.
Glen Ventures said it would use the money to support early-stage healthtech startups through product development and go-to-market efforts. In addition to financial support, the VC aims to connect founders to potential investors and prepare them for Series A rounds.
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The firm plans to invest in four companies with the Eurêka money, which according to the investment mandate, must have intellectual property (IP) originating from Québec public research institutions and be raising their first financing rounds outside of friends-and-family rounds. For its investments outside of the Eureka mandate, Goodman said he wants to back entrepreneurs seeking to “reshape healthcare through technology at home and on a global scale.”
In addition to his role as founding partner, Michael Goodman sits on the MUHC Foundation board of directors. Managing partner Samuel Ohayon completed a master’s thesis in molecular pathology, then shifted to entrepreneurship before co-founding Glen Ventures, according to his LinkedIn.
Glen Ventures’ MUHC affiliation supports the firm’s healthtech focus, giving it access to “large-scale piloting” and “top clinical expertise” for its portfolio companies, the firm said. According to Goodman, this edge sets Glen Ventures apart, allowing them to guide founders through challenges in getting their products into clinical settings.
Glen Ventures maintains that it is the province’s only VC focusing exclusively on healthtech.
“Québec’s early-stage VC landscape is largely generalist or deep-tech-focused, leaving a gap for pre-seed healthtech startups struggling to find lead investors,” Goodman said.
Indeed, investments at the seed stage in Québec have lagged this year, according to a joint Canadian Venture Capital Association and Réseau Capital report. In November, IQ put a key early-stage investment-matching program on indefinite pause, pulling the rug out from some startups counting on the program to close funding rounds.
The Eurêka investment fund is a $100-million initiative that injects capital into early-stage funds and directly invests in healthtech startups, as part of the province’s five-year innovation strategy. The startups must be located in Québec, at the pre-seed stage, and referred by designated public research institutions.
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In a recent interview with BetaKit at the Startup Community Awards, Conseil d’innovation du Québec executive director Luc Sirois lauded Eurêka as one of the government’s highlights of the year. He said it helped to better bridge the gap between academic research and industry, which he called a key driver of innovation.
Québec’s ecosystem has seen large funding rounds recently for Epitopea, KisoJi Biotechnology, and Aramis Biotechnologies, but fewer at the pre-seed stage. A Réseau Capital report recommended that the Québec ecosystem establish a working group to grow its life sciences sector.
“Glen Ventures fills a gap between the advanced scientific research happening in public institutions and the marketplace,” Benoit Leroux, chair of Eurêka’s board of directors, said in a statement.
Glen Ventures recently led and closed a $1.5-million CAD round in an undisclosed digital therapeutics company. Goodman said they expect to close a first co-investment under the Eurêka mandate in the coming weeks.
Feature image courtesy National Cancer Institute via Unsplash.