Vancouver-based Spring Impact Capital is rolling out a new impact-focused venture capital (VC) fund targeting early-stage Canadian firms developing scalable climate and health solutions.
Spring Impact Capital was founded in January by leaders from Vancouver impact investing incubator and accelerator Spring Activator (Spring). The VC firm recently secured its first close toward its $20-million CAD target from Spring and a group of other undisclosed individuals, family offices, and foundations. Spring declined to disclose the size of its first close to BetaKit.
Spring Impact Capital marks an independent expansion of Spring, which has supported impact-focused startups for a decade.
“The Spring community has been asking us for years to start an impact fund based on the significant amount of deal flow and the broad network of support that we have,” Spring Impact Capital co-founder and managing partner Keith Ippel said in a statement. “We already have a lot of early interest and believe we can help supply the growing demand for impact investing as well as help fill the gap in the pre-seed and seed market in Canada.”
Ippel founded Spring Impact Capital with fellow managing partners Graham Day and Olivia Hornby. Ippel is also the founder and co-CEO of Spring—where Day once worked as chief investment officer—while Hornby previously served as a vice president at Goldman Sachs.
“Spring has always had the mission of changing the world through innovation, and the fund was a natural extension of the entrepreneurial and investor programs that Spring has been running for nearly a decade,” Ippel told BetaKit.
Spring Impact Capital marks an independent expansion of Spring, which has supported impact-focused startups for 10 years and funded 14 companies to date through its Impact Investor Challenge. These firms include Moment Energy, GotCare, Viridis Research, VoxCell Bioinnovation, and Ocean Robotics.
Day told BetaKit that a number of the companies in its investment pipeline participated in Spring’s programming over the last decade. “Having a preexisting relationship with a founder helps to derisk the investment as we gain signals of their character and abilities over time,” Day added. “Having said that, we are working hard to build a new pipeline of companies, which benefits from Spring Activator’s national reach in six cities across Canada.”
With its new fund, Spring Impact Capital plans to back 20 to 25 cleantech and healthtech startups at the pre-seed and seed stages and make its first two investments before the end of 2023. The firm plans to issue cheques between $250,000 and $400,000, with room for follow-on investments. According to Day, Spring Impact Capital aims to provide limited partners with “market rate returns by investing in incredibly meaningful companies with strong indicators of scalability.”
The firm will have the ability to lead rounds and obtain board or board observer seats. The fund can also invest in multiple asset vehicles, including SAFEs, convertible notes, debt, and equity. Investment decisions will be made by Ippel, Hornby, and Day, who will be supported by an independent team of advisors on its investment committee.
The creation of Spring Impact Capital followed Spring’s launch of its Canadian impact investing network in 2022. The announcement of Spring Impact Capital’s first close also comes shortly after Spring acquired fellow Vancouver organization Future Capital to bring wealth creation opportunities to more underrepresented communities.
Asked about the process of fundraising as emerging managers in today‘s challenging market environment, Hornby told BetaKit that raising a fund is ”always a big feat,” noting that investors ”want to see a track record as well as a critical mass of capital.”
”Having Spring Activator support this fund has really helped to de-risk this first fund for investors as we have already built out a network of investments and investors,” she argued. ”In addition, Spring Activator has a track record of 12 SPVs in Canadian health and climate companies, which offers investors an example of the portfolio we plan to build.”
Spring Impact Capital will focus on startups addressing “human and planetary health,” and plans to have a particular focus on supporting underrepresented founders, including Black entrepreneurs and women, and promoting diversity within its portfolio firms.
Hornby cited Spring’s “deep track record of working with women, ethnic minorities, and underserved populations,” which she claimed will help Spring Impact Capital connect with “commonly overlooked” communities and therefore potentially achieve greater returns and impact.
Feature image courtesy Spring Impact Capital.