Montréal’s Amiral Ventures has raised $40 million CAD from the Québec government, Desjardins Capital, and dozens of tech entrepreneurs for its first fund that aims to lead early-stage deals amid a domestic downturn for venture capital (VC).
The venture firm, founded by repeat entrepreneurs and investors Frédéric Bastien, Dominic Becotte, and Nectarios Economakis, held its first close of a targeted $75-million fund on Monday after nearly three years of fundraising. The provincial government anchored the fund through Investissement Québec, Desjardins Capital wrote the first cheque, and nearly 50 investors and entrepreneurs joined as limited partners (LPs), including the co-founders of Québec startups BrainBox AI and Workleap.
“Every time leadership is ceded abroad, Canada loses ownership of its most successful businesses.”
Amiral manifesto
The firm plans to back 15 tech companies between the seed and Series A stages, with annual revenues typically between $750,000 and $1 million, managing partner Bastien told BetaKit in an interview yesterday. The fund focuses on sectors such as enterprise artificial intelligence (AI), robotics, supply-chain technology, manufacturing, and startups that “boost enterprise productivity, resilience, and sustainability.”
Amiral has already backed enterprise software startup Maxa and AI-powered architecture platform Maket. The fund is led by Bastien and co-managing partner Becotte, as well as partner Economakis. Julie Lacasse, an LP in the fund and a board member of several Québec tech organizations, is joining as a venture partner. The meaning behind “Amiral” is twofold: it evokes a flagship (vaisseau amiral in French) and refers to the white admiral butterfly, Québec’s proposed official insect (Economakis got a butterfly tattooed when the fund held its first close).
A two-time founder and angel investor, Bastien said he was consistently “disappointed by the lack of leadership in the VC ecosystem in Canada.” When fundraising for his second startup’s Series B, he ended up going to the US, getting a term sheet in San Francisco, and coming back to find many Canadian VCs interested in filling out the round. Bastien’s concerns have been privately echoed by Canadian VCs, some of whom argued at the CIX Summit in April that there were “more price-takers than price-setters” in the country’s early-stage VC ecosystem.
Amiral aims to fill that leadership gap by almost exclusively leading rounds, Bastien said, which fits with the firm’s ethos. “Every time leadership is ceded abroad, Canada loses ownership of its most successful businesses,” Amiral’s manifesto reads. “An ecosystem of “follower investors” produces an economy of subsidiaries, when what we need are global leaders.”
That’s not to say that US investors shouldn’t participate in Canadian deals, Bastien clarified. But letting them lead constantly is the “surest way you’ll get small acquisitions and subsidiaries of Amazon instead of building more Shopifys,” he said.
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With the Québec government as its anchor investor, Amiral will have to devote three quarters of its first $40 million to backing Québec-based startups. Bastien said that Amiral will be courting LPs outside of Québec for the rest of its $75-million fund. That means that when it holds a final close, the fund will be expected to deploy just 50 percent of its total capital within Québec.
Amiral is stepping into Québec’s VC scene at a particularly dismal time for investment activity. Though pre-seed and seed-stage investments saw a modest uptick over the summer, Réseau Capital CEO Olivier Quenneville told BetaKit in August that “overall deal flows remain relatively weak compared to historical levels.” Fundraising for VCs has also been difficult, particularly for emerging managers, as middling returns and a lack of exits have led institutional investors to back funds more cautiously.
As a first-time fund manager, Amiral was no exception. Bastien described the three years he’s been fundraising as “the hardest in a decade” to raise a fund. He said the team could have held a first close of $15 to $20 million a year and a half ago, but decided to stay firm with its $40-million target to ensure it could lead all of its deals. “You cannot do that with a $250,000 cheque,” he said.
Québec’s early-stage ecosystem, largely supported by the provincial government, now counts a few new entrants. Spinoff fund Telegraph Ventures secured $35 million for pre-seed AI startups in September; a month later, Investissement Québec relaunched a popular early-stage funding program as a $200-million VC fund. In the new year, local firm Boreal Ventures plans to raise a second fund, and heavy-hitter Inovia Capital is planning two new funds to back startups and VCs.
Feature image courtesy Amiral Ventures.