Montréal-headquartered healthtech investment firm Amplitude Ventures has completed the final close of its precision health-focused fund. The firm declined to disclose its final close total but told BetaKit the oversubscribed close surpassed Amplitude’s original target of $200 million CAD.
Several VCs that spoke with BetaKit noted that it is highly irregular for a fund to not announce its final close number unless it has failed to reach its fund target. However, sources familiar with the deal did confirm to BetaKit that Amplitude exceeded its $200 million fund target.
“We had a belief that the science was there, and that the entrepreneurs were there, and I think that’s been massively validated.”
— Dion Madsen
The new limited partners (LPs) that participated in Amplitude’s final close include RBC (led by RBCx), Alberta Enterprise Corporation, Cathay Capital, and Alexandria Venture Investments, the venture arm of Alexandria Real Estate Equities. A number of undisclosed high-net-worth individuals also participated in this latest close, which brought the total number of LPs in the fund to 37. Other LPs include Investissement Québec, Teralys Capital, and Vancouver City Savings Credit Union.
RBCx, the Canadian bank’s new tech and innovation banking group, is a notable participant in Amplitude’s fund. RBCx now acts as lead sponsor for RBC’s indirect VC investments, and also recently sponsored the bank’s investment in Version One Ventures when it secured $100 million USD across two newly announced venture funds.
Amplitude Ventures is a spin-out of the Business Development Bank of Canada (BDC) and is led and founded by the former healthcare investing team at BDC Capital, Jean-François Pariseau and Dion Madsen. BDC also notably provided the largest capital commitment to Amplitude’s fund in 2019, and is considered a “cornerstone” investor in the fund.
With 10 completed precision health deals and more than half of its fund either deployed or reserved, Madsen believes Amplitude is successfully proving out its investment model in Canada.
“It was a pretty audacious goal for us to step out and say, we want to raise a $200 million precision medicine fund that’s primarily focused on Canada, because this has never been done before,” Madsen told BetaKit. “It’s never been done with such a focused investment strategy at that scale in Canada.”
“We had a belief that the science was there, and that the entrepreneurs were there, and I think that’s been massively validated,” he added.
Amplitude invests with a focus on specific verticals within precision health, a field that exists at the intersection of tech and healthcare. With an investment period of five years starting in November 2019, the fund’s thesis is based on supporting three regional clusters in Canada’s precision health ecosystem: next-generation imaging and intelligent medical devices in Toronto, AI and machine learning in Toronto and Montréal, and targeted and cellular therapy in Vancouver.
Though headquartered in Montréal, Amplitude Ventures has offices in all three of its cluster regions. Madsen said bringing on investors like Alexandria will help Amplitude’s portfolio companies not only with funding, but also with the potential for developing new facilities.
“[Alexandria is] seeing tremendous growth in the Canadian sector, and want to capitalize on having a partner there that can not only invest in some of our companies as they’re starting to grow but provide the facilities so that there’s no friction to their growth,” said Madsen. “[It will] really enable these clusters to grow much more quickly and attract more talent.”
The firm’s strategy is to invest in early-stage and late-stage companies. Along with making traditional investments in existing companies, Amplitude also looks to build healthtech companies. Amplitude looks to source very early-stage companies, ideas, or projects focused on precision health. From there, the firm invests and looks to build out a company that can achieve scale.
Madsen said approximately 66 percent of the fund is either invested or reserved for investments. Amplitude has also completed 10 of its targeted 16 investments through the fund.
“It was a pretty audacious goal for us to step out and say, we want to raise a $200 million precision medicine fund that’s primarily focused on Canada, because this has never been done before.”
One of the fund’s first investments was Repare Therapeutics, which last year went public on the Nasdaq, completing the largest-ever initial public offering of a Canadian biotech company at the time. Madsen called Repare’s exit a “great early validation” of Amplitude’s model.
Another portfolio company is Deep Genomics, which raised a $40 million Series B round of funding last year. Madsen told BetaKit that Deep Genomics is currently in the process of raising its Series C round of funding, which is expected to wrap up in the coming weeks.
In addition to investing in companies, Amplitude has also been executing on the company creation side of the fund. Alongside Genesys Capital, Amplitude helped launch Giiant Pharma, a Montréal-based biotech company, which develops drug therapeutics with biological targets in gastroenterology. Amplitude and Genesys co-led Giiant’s seed round of funding, which closed in May.
Amplitude also created Radiant Biotherapeutics, which is currently building an antibody platform. The venture firm brought in Bharat Srinivasa, co-founder and principal at Amplitude, to lead Radiant Biotherapeutics as founding CEO and board director. Amplitude also tapped its vice president of finance Matthew Rosenberger to act as Radiant’s CFO.
Vancouver-based Notch, which raised an $85 million Series A round in February, is another one of Amplitude’s portfolio companies. Notch is developing stem cell-derived immunotherapies, with an initial focus on cancer. In January, Amplitude also invested in Montréal-based LQT Therapeutics as part of a yet-unannounced round of funding.
In the last year, the Canadian healthtech sector has seen myriad growth opportunities due to the many changes and disruptions brought about by the COVID-19 pandemic.
Canadian tech companies are going public at an unprecedented rate, including companies in the healthtech sector. Repare Therapeutics’ record-setting IPO was later followed by that of Vancouver-based AbCellera, which completed a $555 million IPO in December.
The health sector has also been attracting a great deal of interest from VC firms as of late. CTI Life Sciences, another Montréal-based venture capital firm, recently closed $100 million for its third venture fund.
“We’re currently seeing a tremendous quality of transactions right now in Canada, and I think that’s given us a lot of enthusiasm,” Madsen said. “But we can’t predict how fast these [deals] will close and how fast things will come. We still have a number of years to finalize our investment period, so we’re going to continue to focus on that.”
Feature image courtesy Amplitude Ventures.