i4 Capital announced the first closing of its deep tech seed fund, raising more than $40-million of what is anticipated to be a $60-million fund.
The i4 Capital Fund won The Quebec Seed Fund Competition contest organized by the Ministry of the Economy, Innovation and Energy of the Quebec Government. As part of this contest, the following institutional investors have invested in i4 Capital Fund: Investissement Quebec, Fonds de solidarité FTQ, Teralys Capital and Fondaction, along with the i4 Capital GPs and several private investors.
The fund is looking to invest in innovative startups that have developed a breakthrough technological innovation.
The Fonds québécois d’amorçage Teralys is a seed stage fund of funds. The firm invests in funds that in turn invest mainly in Québec-based seed-stage companies. To date, the fund has invested in four “innovation funds” and one life science fund.
The deep tech fund closed on May 23.
The fund is looking to invest in innovative startups that have developed a breakthrough technological innovation. Particular areas of investment include startups in the industry 4.0 space, which includes artificial intelligence (AI), Internet of Things (IoT), cloud computing and analytics.
The fund is also targeting the innovative manufacturing sector, information technology, and AgTech.
i4 Capital anticipates making minority investments in some 20 startups. The form of those investments will be in equity or quasi-equity stakes to support the startups’ development processes. The City of Quebec also intends to provide a grant of $600,000 for operational support to the iCapital Fund, whose head office is in Quebec City.
To date, the fund has made two investments that will be disclosed in the weeks to come.
The final close of the fund is anticipated to take place one year from the first close, while the fund itself will have a life of 10 years.
Jean-François Grenon and Tim Tokarsky co-manage the fund, along with founding partners Antony Acciarri, Antoine Bellemare, and Nadia Martel. Grenon has acted as an angel investor for more than 15 years.
“The emergence of a new generation of local venture capital managers is essential to support the development of innovative technologies,” said Philippe P. Huneault, Vice-President, Private Equity and Impact Investments, Technologies and Fund Management, and Head of International Business Development of the Fonds de solidarité FTQ.
“The Quebec Seed Fund Competition improves access to capital for entrepreneurs who will tackle the many challenges that Quebec will have to face in the coming years,” Huneault added.
i4 Capital is the latest fund to benefit from the Fonds québécois d’amorçage Teralys, financed by the global investment group CDPQ. Teralys Capital received $40 million CAD in 2022 from CDPQ in an increased commitment to its seed-stage fund of funds, Fonds québécois d’amorçage Teralys.
Fonds québécois d’amorçage Teralys is also a founding partner of The Quebec Seed Fund Competition (le Concours des fonds d’amorçage du Québec) alongside the provincial government, Le Fonds de solidarité FTQ, and Fondaction. The competition looks to foster the creation of new investment funds.