Vancouver-based public and private asset manager PenderFund Capital Management has officially unveiled a new venture capital group focused on private investments in the technology sector.
The group, Pender Ventures, will manage the private investments from three funds, including the Pender Growth Fund, which has a portfolio of private and public companies, and the Working Opportunity Fund, which invests in private, BC-based companies, such as D-Wave Systems and General Fusion.
“Continued digital transformation has provided the impetus and Pender Ventures is the vehicle that will position us to double-down.”
– Maria Pacella, Pender Ventures
The group will also manage the Technology Inflection Fund, for which it recently held the final close, pulling in around $5 million for a fund total amounting to $25 million. Inflection has been in operation since 2018, having made five tech-focused investments to date.
Limited partners (LPs) in the fund, called Pender Technology Inflection Fund LP, include credit union Vancity and Export Development Canada through its Women in Trade program, which sources women-led funds. Other LPs were not disclosed, but included an Alberta-based financial group, family offices, and high-net-worth individuals.
Managing partner Maria Pacella is leading the Pender Ventures team, which consists of six people, including new partner, Kristina Bergman.
A BC native, Bergman is Pender Ventures’ second female partner and is moving back to Canada from Seattle after exiting her latest startup. Bergman’s role will involve sourcing new deals and helping to create value for Pender Ventures’ existing portfolio companies.
While PenderFund is a diversified asset manager, meaning it already invests in both private and public markets, Pacella told BetaKit establishing Pender Ventures was a way to reintroduce the PenderFund brand into the private investment and venture capital space.
She lamented that PenderFund Capital is well known in the public markets, but not as well known in the private tech markets, despite the fact that PenderFund’s roots are in venture capital.
“There are not that many asset managers that have venture capital as an area in which they invest,” Pacella told BetaKit. “They’re all public or all private. We think, fundamentally, it’s all about understanding a business and then figuring out the best way to invest, regardless if they’re public or private.”
Pacella noted her hope is that the Inflection fund, though small, is the first step to PenderFund becoming a more established player in the venture capital ecosystem.
“When I joined Pender, the goal was to focus our investing on some of the most exciting growth opportunities, and these happened to be in technology. Now three years later, technology companies are becoming even more integral to how we live and work,” said Pacella.
“This continued digital transformation has provided the impetus and Pender Ventures is the vehicle that will position us to double-down on the Pender ‘inflection point’ thesis,” she added. “Our goal is to help companies scale faster, have a global impact, and generate outsized returns for our investors.”
Pender Ventures’ focus is on data-centric startups in healthtech, enterprise software, and industrial transformations. Pacella told BetaKit the fund generally targets Series A-stage companies that have early customers and are generating revenue roughly between $1 million and $3 million.
“The reason why we named the fund ‘Inflection’ is we really seek to invest in companies that are at that key point where they’ve figured out product-market fit,” Pacella said. “The funding is used to scale usually the team, the product, a new sales and marketing channel. We try to help them with that.”
The $25 million Inflection fund, which held its final closed in October 2020, is a standard 10-year limited partnership and aims to make 10 to 12 investments. Thirty percent of the fund has been spent since it was launched in early 2018, leaving around $17.5 million for future investments. Pacella stated plans to make all of the fund’s new investments in the first four years of its life.
Pender Ventures invests between $500,000 to $2 million per investment with a total of $4 million to $5 million over the life of the companies.
Pacella said the $25 million Inflection fund is geo-agnostic across North America, but noted the lack of funding in Western Canada presents an opportunity for Pender Ventures to fill a gap. She also noted that, of the investments already made, most deals have been in British Columbia-based startups, with one in Winnipeg.
Pender Ventures’ first investment through the $25 million Inflection fund was in March 2018 into Clarius, which offers a portable handheld ultrasound scanner. Since then, the fund has made four additional investments including in Jane, Copperleaf, Checkfront, and Librestream.
Feature image source Unsplash. Photo by Mariana Montes de Oca.