Luge Capital, a VC firm with offices in Montreal and Toronto, has closed $75 million to begin operations for its fund.
The firm last announced that it had raised $50 million in October 2017 from the Caisse de dépôt et placement du Québec (CDPQ) and Desjardins Group, with participation from Sun Life Financial, the Fonds de Solidarité FTQ, and La Capitale. Luge Capital said that it may expand its fund to hit $100 million over the next few months.
The fund was co-founded by Montreal’s David Nault, who joined iNovia Capital in 2012 as an entrepreneur-in-residence and acted as a principal at the fund until January 2018. During his time at iNovia, he invested in companies like Unsplash, which recently raised a $6.25 million Series A, and Busbud, which raised a $14 million Series B in January.
“We are looking for young mission-driven companies that challenge how the world interacts with financial services. We invest in bold teams that demonstrate passion, manage risk, and optimize for performance.”
“Having the opportunity to be part of the founding team of a new (FinTech) fund does not happen often in one’s career and the stars aligned with great LPs, team members, and iNovia’s partnership,” said Nault. “The move was a win-win for all and I can continue to tap into the experience and network of iNovia to help the founders we invest in.”
Co-founder and general partner Karim Gillani will oversee the fund’s Toronto operations. In the past, Gillani led corporate development for Xoom, a cross-border remittance company that was acquired by PayPal in 2015 for $890 million USD, and M&A activities for BlackBerry in Silicon Valley.
“We have partnered with world-renowned institutions that bring considerable industry knowledge and resources to enable us to help entrepreneurs build their businesses,” said general partner Nault. “In addition, our AI and data-driven companies will have the opportunity to partner with our investors to access key insights in order to build best-of-breed solutions.”
Luge’s focus is on companies that improve financial services for people, businesses, and financial institutions. In particular, investee companies will be improving customer experiences, enhancing efficiency for financial institutions, and implementing data-driven methods and artificial intelligence for decision-making. While using AI isn’t a requirement for companies to receive investment, Gillani said that it foresees AI being “transformational” to removing complexity in the financial services industry.
“We are looking for young mission-driven companies that challenge how the world interacts with financial services,” said Gillani. “We invest in bold teams that demonstrate passion, manage risk, and optimize for performance.”
Luge Capital will concentrate on seed and Series A financing, with initial investments between $250,000 and $2 million. Michele Romanow, co-founder of Clearbanc, will be an advisor to the fund.
“Karim and David have huge ambitions for Luge,” said Romanow. “They look for founders and teams that are driven to improve how we all interact with money and data, in a global context. Financial services are at an inflection point, where small groups of highly talented people can deliver new products with delightful experiences that simplify how people perform the most fundamental tasks: opening a bank account, applying for credit, seeking insurance, and paying bills.”
In addition to the core team, Luge has also partnered with iNovia Capital, with whom the firm will collaborate on co-investment opportunities and operations.
“iNovia is one of the leading Canadian VC firms, and our partnership with them delivers tremendous value,” said Gillani. “They will help us with the operations of Luge, which will include support for finance and accounting, legal, HR needs, reporting and other back-office functions. They have a fantastic team and network that we can leverage as we grow the Luge portfolio.”
Photo by Eva Blue.