Disruption Ventures, a Canadian female-founded venture capital fund investing in women-led businesses, has deployed its first investment.
The fund is looking to serve a community that is normally underrepresented in the VC community.
Disruption participated in a $1.34 million CAD funding round for San Francisco-based vacation rental SaaS solution Hostfully. Hostfully’s funding round was led by Precursor Ventures, with participation from Wharton Alumni Angels, Blue Startups, and MergeLane, as well as Disruption.
Hostfully has designed an end-to-end property management platform to help vacation rental property managers increase bookings and boost revenue. Hostfully was founded in 2015 by Margot Schmorak, who began the first iPhone developer program at Apple.
“Margot has built a diverse, product-focused team that is solving a specific problem in a high-growth industry,” Elaine Kunda, the firm’s managing partner told PE Hub. “Hostfully has a proven model and is generating real recurring revenue.”
Kunda launched the Toronto-based Disruption in May 2018, seeking to deliver early-stage capital to female founders, with the goal of being the starting point for female founders and entrepreneurs. Disruption cuts cheques ranging between $500,000 to $1 million, either as a lead investor or co-investor.
The idea for Disruption started about seven years ago, but only came to the attention of potential investors recently. Earlier this year, Scotiabank became one of Disruption’s LPs, leading a $13 million investment in the fund. The $13 million marked nearly half of Disruption’s $30 million target. CI Financial Corp is also an investor in Disruption.
Disruption was founded to help close the gap for women in tech. A 2018 report by Female Funders found that only 14 percent of Canadian venture capital partners are women. Another report by PayPal and Barraza & Associates found that businesses owned by women have limited access to capital and therefore generate an average of $68,000 less revenue than male-led businesses. The fund is looking to serve a community that is normally underrepresented in the venture capital community, by investing in mostly seed rounds and some Series A funding for pre or early-stage revenue tech companies.
Disruption Ventures told PE Hub it plans to make preliminary investments with the $13 million from Scotiabank, with aims to continue fundraising to reach its $30 million funding goal sometime this year. Reaching that goal would make it the largest private, independent, and women-only led fund in Canada, according to Scotiabank.
Kunda previously served as CEO of women’s media network b5media, acquired by Alloy Digital in 2012, and local search platform ZipLocal, acquired by Canpages in 2009. Both companies were backed by Relay Ventures, which agreed to co-invest $5 million in Disruption-backed startups of mutual interest.
Relay Ventures is also incubating Disruption’s team, Kunda told PE Hub, by sharing personnel and back-office resources at Relay’s Bay St. office in Toronto. Disruption’s other advisors include Clearbanc CEO Michele Romanow, OMX CEO Nicole Verkindt, and Scotiabank executive vice president Gillian Riley.
Disruption is part of a budding group of Canadian women-focused venture programs. Others include the federal government’s BDC Capital Women in Technology Venture Fund, and StandUp Ventures, as well as Dream Maker Ventures, which focuses on diverse, underrepresented, and underestimated entrepreneurs.
Image courtesy Disruption Ventures.