Toronto-based MaRS spinout Amplify Capital has closed its third impact-focused venture capital (VC) fund focused on climate, health, and work technology startups.
Managing partner Kathryn Wortsman and partner Craig Hunter revealed to BetaKit in an exclusive interview that the early-stage VC firm held its final close of Fund III this April, securing $60 million CAD in total commitments.
“My goal is to build an enduring fund franchise.”
Kathryn Wortsman, Amplify
The announcement comes as Amplify celebrates a decade in business, and its latest investment in Calgary cleantech company Cura. Wortsman said she is happy with Amplify’s progress over the past 10 years, and excited about the team and investment thesis it has in place.
“It’s so great to have built the foundation,” Wortsman said. “My goal is to build an enduring fund franchise.”
Larger cheques and “significantly more bets”
Amplify’s third fund is anchored by repeat limited partners (LPs) in Québec’s Fondaction and the Royal Bank of Canada, with support from newcomers the Business Development Bank of Canada, and the Government of Canada (via Toronto-based Social Finance Fund distributor Realize Capital Partners and the inclusive growth stream of its Venture Capital Catalyst Initiative). Several undisclosed family offices and high-net-worth individuals are also supporting.
Amid what remains a “tough” VC fundraising market, Wortsman and Hunter said Amplify landed “close to” its initial target. Fund III is ultimately two-thirds larger than Amplify’s $36-million second fund from 2020. Hunter said this size allows the firm to cut larger cheques, lead rounds, and place “significantly more bets” as it looks to build a Fund III portfolio of 25 to 30 companies.
Amplify is already more than halfway there: it has made 14 Fund III investments to date, backing Cura, Vancouver-based Reusables, Halifax’s Planetary Technologies, and Montréal-based Lyteflo, among others.
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Wortsman said Amplify was able to raise Fund III at a good multiple of Fund II, given its history of returning cash to LPs across its first two funds, which both have “top-decile” distributed to paid-in capital among their cohorts. She said Amplify has fully returned its nearly $6-million first fund, which was launched 10 years ago under the banner of Toronto’s MaRS Discovery District. She said Fund II has also performed well to date.
Amplify’s biggest winners include Calgary-based Carbon Upcycling Technologies, Toronto’s Hydrostor and Inkblot, Canadian-led ThinkLabs, and Montréal-based Pathway Medical and Valence Discovery.
Hunter argued Amplify also benefitted from its now 10-year track record in deep tech before it was hot, from energy startups to AI for doctors pre-ChatGPT. “We’ve been investing in these sectors that are now gaining a lot of interest and popularity for a decade,” Wortsman added.
Picking through “chaos and confusion”
Founded in 2016 as the MaRS Catalyst Fund, Amplify rebranded and spun out of MaRS in 2019 to focus on backing early-stage Canadian healthtech, edtech (which it has since expanded to work tech more broadly), and cleantech startups at the seed and Series A stages as an independent firm. Like other impact funds, Amplify aims to generate strong financial returns and quantitative environmental, health, and social impacts.
Wortsman, who has spent most of her career working in VC and private equity, has been with Amplify from the start. Hunter, a repeat tech entrepreneur and prolific angel investor, joined Amplify’s five-person team last year, replacing Daniel Armali as partner. Wortsman said Hunter helps solidify the firm’s senior leadership team and provide the “operator-founder background” its portfolio companies need as they grow.
Amplify has led or co-led in the majority of Fund III’s core positions. It will keep concentrating on pre-seed and seed-stage businesses, with select Series A investments, pouring between $750,000 and $3 million into each startup it backs. Wortsman said the majority of its investments will be in Canada and expects half its capital to go to climate tech.
Wortsman believes the current tech vintage is the best since 2016, given the amount of interest and “disallocation” across AI, climate, and deep tech. “I love investing in markets where there’s a little chaos or confusion, because for those of us who’ve been around and who know what they’re doing and know what to look for, it can be really beneficial,” she said.
Feature image courtesy Amplify Capital.