Waterloo-based angel investor network Archangel has announced its first close of $10 million CAD.
The Archangel Network of Funds consists of a group of funds founded by a collection of Canadian “superangels” and venture capitalists from the Toronto-Waterloo corridor. Archangel currently serves as the shared back office for three angel funds: Adrenaline, Axion and StarForge—each of which has a different thesis and set of general and limited partners. Collectively, these three funds have raised $10 million.
Archangel was initially launched last April in response to COVID-19.
Archangel aims to invest in early-stage high-growth Canadian tech startups “across a wide range of sectors,” with a particular focus on artificial intelligence (AI), smart manufacturing, cleantech, and health sciences.
The network operates under a vintage model, whereby new investors and capital are accepted into its associated funds at the beginning of each calendar year.
Archangel was initially launched last April in response to COVID-19, in order to help entrepreneurs accelerate the development and commercialization of “any solution that has urgent, national or global need.” To date, Archangel has invested in three AI-focused Canadian tech startups: Waterloo-based DarwinAI, Markham’s EAIGLE, and Toronto’s ForceN.
“The purpose of working as a network with different funds is it allows us greater scale and reach to support the entire ecosystem,” said Benton Leong, general partner at Archangel. “We are able to tap into our various resources and create these unique connections and opportunities for investment.”
Archangel’s other general partners include Randall Howard, Jacky Chen, Ellen Fang, Ehsan Mirdamadi, and Peyvend Melat. Amber French serves as the fund’s principal, Todd Bissett as legal advisor, and Danielle Graham as its investment committee lead. Last May, Archangel added David Rich as a general partner, while Aislinn Shoveller joined the fund in January as an associate. Collectively, the group has made over 100 early-stage investments.
Last April, Archangel told BetaKit it was targeting a first fund size of $10 million and already had “significant commitments, including a strong GP commitment.” The group referred to its first close as “oversubscribed.”
“The $10 million close surpassed our expectations for the first year,” French told BetaKit. “We needed a minimum to have a sustainably viable fund and we more than doubled that threshold.”
The angel investment network backs pre-seed and seed-stage Canadian tech companies, and aims to close the funding gap by providing early risk capital and active guidance to Canadian founders. Each Archangel fund has its own distinct investment thesis. According to Archangel, its three funds will also “collaborate together on various deals depending on fund focus.” In total, the group plans to invest between $100,000 and $300,000 across 30 to 50 deals over a five-year period.
Archangel also intends to work “synergistically” with the early-stage tech ecosystem by partnering with industry players, such as Communitech and The Golden Triangle Angel Network.
French said Archangel’s structure permits it to accept new investors at the beginning of each year, allowing the fund to grow. “The beauty of Archangel’s model is that we will be able to add more angel funds to the family over time, further unlocking more early-stage capital in Canada,” she said.
Archangel also aims to make angel investments accessible to investors “who otherwise are not able to participate.”
“A lot of would-be angel investors either don’t have the time or expertise to evaluate tech companies, or they don’t know how to find and approach startups in order to invest,” said French, who added that Archangel “makes it easy for both new and experienced investors to participate,” leveraging the time, experience, and networks of its general partners in order to provide “excellent dealflow, diligence, and diversification.”
Photo courtesy of Archangel