Golden Ventures closes nearly $140 million CAD for fifth seed-stage VC fund

Toronto-based Golden Ventures has secured about $103 million USD ($139 million CAD) for its fifth venture capital (VC) fund focused on seed-stage technology startups across North America.

The sector-agnostic VC firm plans to make 30 core investments in startups across Canada and the United States (US) through Fund V, which it will begin investing out of later this year. Golden will focus on leading or co-leading rounds across the seed spectrum, companies in Toronto, Kitchener-Waterloo, Montréal, and Vancouver, with initial cheques of $500,000 to $3 million.

Golden initially began fundraising for its fifth fund last September before holding a final close in December following strong support from existing investors—tidy work amid a particularly tough fundraising environment for tech and VC.

“They’ve built up an amazing team, they have a pretty stellar reputation … and their track record on the returns side is outstanding.”

In an interview with BetaKit, Golden Ventures founder and managing partner Matt Golden credited this turnaround to the track record that Golden has built over the past 13 years and its consistency across various market ups and downs through its funds, which now total seven.

“We’re really building a franchise here,” said Golden, who noted that the firm’s Fund V strategy will remain largely the same as its prior VC funds. “We find that it really works,” he added.

This sentiment was echoed by some of Golden’s Fund V investors, which include returning limited partners (LPs) like BDC Capital, ECMC Group, Foundry, HarbourVest Partners, Kensington Capital Partners, Northleaf Capital Partners, RBC, Teralys Capital, the University of Chicago, and Vintage Investment Partners, as well as new backer Deloitte Ventures.

“When we look at seed investors, Golden really stands out in Canada as a top performer,” Kensington managing director Rick Nathan told BetaKit in an interview. “The fact that they were essentially able to raise their fund so quickly and effectively in this kind of a market environment is a real testament to that.”

Golden was launched in 2011 to address the lack of capital and mentorship available to early-stage founders in Canada. Since then, it has grown into a nine-person team and one of Canada’s most prolific VC firms, backing over 100 startups, including ApplyBoard, Avidbots, BenchSci, Faire, Float, Inkbox, Neo Financial, Shakepay, Waabi, and Xanadu. Some of its biggest exits to date have included Wattpad and SkipTheDishes.

This final close makes Fund V roughly the same size as Golden’s $100-million fourth fund. For his part, Golden said that this was the target “from day one.”

Unlike some other VC firms that have moved “upmarket” to later stages of investing and raised larger funds, he noted that Golden is not driven by assets under management (AUM). “For us, AUM is not interesting—it’s really trying to optimize for having the right fund size for the strategy,” Golden said.

“Each fund is crafted to maximize support for founders and returns for investors,” Golden general partner Ameet Shah told BetaKit. “For us, $100 million is the sweet spot.”

Fund V brings Golden’s total AUM to $364 million. This amount also includes a $40-million, previously unannounced second Opportunities Fund the firm quietly raised in 2022 to capitalize on its winners that it continues to invest from with the same strategy as its first opportunity fund, which Golden launched back in 2021 alongside Fund IV amid a much hotter tech market. According to Golden, those two funds have performed “as expected” so far.

To better support the needs of founders outside of Silicon Valley, Golden has built up its capacity to help its portfolio with fundraising and hiring. Over the years, Golden has prioritized consistency, assembling a dedicated group of long-term supporters spanning multiple funds and bringing on one or two new institutional LPs per fund.

Golden said the VC firm’s LP base this time around is similar to its previous funds, consisting largely of institutional investors, including funds-of-funds, endowments, and corporate VCs from across Canada and the US. The only noticeable shift Golden has seen on this front has been a slight decline on the family office side, as some have sought to rebalance their portfolios amid the downturn, coupled with a small increase in corporate VC support.

For Northleaf, which has been an LP in Golden since its first fund and is selective about the VC funds it backs—investing in 14 fund managers over 15 years before its latest fund—Golden’s measured approach to investing has been a selling point.

Northleaf managing director and venture partner Ian Carew noted that Golden has raised a new fund every three years or so, “kept a lid on fund size growth,” and shown “discipline” in how it invests, which he described as “a huge differentiator” compared to how some other players have behaved in recent years. “They didn’t get super excited when the markets were overheated and plough all their capital to work,” Carew told BetaKit in an interview.

“There aren’t that many [VC] firms that can demonstrate that kind of a track record, not just having some good numbers, but having them through different market cycles, different kinds of environments,” added Kensington’s Nathan.

In Fund V, Golden’s lone new institutional LP is Deloitte’s corporate VC fund, which has been tracking the seed-stage investment firm since its own launch two years ago and biding its time until it returned to market. Golden marks Deloitte Ventures’ fifth fund investment.

“They’ve built up an amazing team, they have a pretty stellar reputation amongst founders, LPs, and funders across the ecosystem—including south of the border—and their track record on the returns side is outstanding,” Deloitte Ventures managing partner Talia Abramowitz told BetaKit in an interview.

Abramowitz noted that the two firms also share alignment in terms of the verticals they both tend to focus on, which include B2B software, FinTech, and artificial intelligence, among others. For Deloitte Ventures, which typically invests in tech startups at the Series A and Series B stages, Golden also offers an attractive source of potential deal flow.

“For us, $100 million is the sweet spot.”

Despite a track record of success, Golden acknowledged that the firm and its portfolio companies have not been immune from the current market downturn.

In the tech world, the emphasis has shifted from growth at all costs to “more steady growth” as raising that next stage of VC funding has become more challenging, Golden said. As market conditions have deteriorated, some Golden-backed companies, including Clearco, Properly, Ritual, and Top Hat, have struggled.

But Golden and Shah ultimately remain bullish on the ability of Canadian founders to navigate such an environment.

“This is the type of market that frankly, we think Canadian entrepreneurs are well suited for,” said Shah. “This is when substance shines through and it’s just another reason that we’re long Canada. We think this is the type of market where builders will be rewarded, and I think this just connects with the culture and how people build here.”

Feature image courtesy Golden Ventures.