As the founder and CEO of CareGuide, it’s John Philip Green’s job to stay on top of any source of revenue opportunity to help grow his company. So imagine his surprise when he discovered CareGuide investor iNovia Capital was providing the company with an extra $100,000 beyond its original investment. “I’m supposed to know this stuff,” Green joked.
“We effectively got a $600k investment from iNovia but only had the dilution of a $500k investment.”
– John Philip Green, CareGuide CEO
The $100,000 was actually a credit, not cash, for Amazon’s AWS Activate program, which CareGuide could use across its portfolio of care provider websites. But in Green’s mind, the difference was actually a benefit. “This is as good as cash investment, as we were going to spend the money anyway,” he said. “Actually, no, it’s better than cash because it’s non-dilutive. We effectively got a $600k investment from iNovia but only had the dilution of a $500k investment.”
The benefit of such additional resources for early-stage startups is clear, which is why iNovia has also secured service agreements for its portfolio companies with marketing automation platform Sendgrid, as well as cloud hosting service provider Digital Ocean.
Speaking with Antoine Nivard, a Senior Anaylst at iNovia, I learned that these ‘portfolio perks’ are more commonly found via accelerators, with iNovia being one of the first Canadian-based VC firms to structure such partnerships.
“The goal for us is to act as a connector,” Nivard said. “On one hand, we get solicited by a lot of service providers to offer services to our portfolio companies at a discount. On the other hand, a lot of our portfolio companies have needs for such services that they would pay full price or negotiate by themselves if we didn’t step in to structure such partnerships for the entire portfolio. It’s win-win-win.”
“The goal for us is to act as a connector.”
– Antoine Nivard, iNovia
Pierre Vanacker, CTO at iNovia portfolio company TrackTik, indicated to BetaKit that the benefit of such agreements extends beyond the cash to established relationships with the service providers – relationships, as Nivard indicated, young startups might struggle to establish on their own.
“Beside the financial support provided by the significant promotional credits, Amazon Activate has also provided us with valuable support, particularly with the one-on-one meetings with AWS Solutions Architects,” Vanacker said. “TrackTik was able to benefit from guidance regarding the best practices for our application and database performance with high availability requirements.”
iNovia is currently in discussion with as many as 10 other potential service partners for its burgeoning program. For now, the firm is gathering feedback from its portfolio companies to see how else it can support their needs. It’s a process Nivard expects to become more common throughout the Canadian ecosystem.
“I wouldn’t be surprised to see other VC firms in Canada structuring something similar for their companies as well in the next few months,” Nivard said.