Toronto’s Storytime Capital has launched its second venture capital (VC) fund and expanded its leadership team as it gears up to invest in more Canadian tech startups developing products that change how work is found, completed, and organized.
The early-stage VC firm held its first close of Fund II this week, securing more than $14 million CAD in commitments. This comes just two years after Storytime completed the final close of its first, $17.5-million fund, amid what remains a particularly challenging VC fundraising environment, especially for emerging managers.
Storytime ultimately aims to close $25 million to $30 million for Fund II over the next year to back 20 pre-seed and seed-stage tech companies building what co-founder and managing partner Neil Grunberg described as “the future of work.” Storytime has brought on Lauren Epstein as general partner (GP) to support those efforts.
“Our children won’t work the same way, with the same tools that we worked with, and we’re leaning into that opportunity.”
Neil Grunberg,
Storytime Capital
The VC firm’s thesis remains consistent. “Our children won’t work the same way, with the same tools that we worked with, and we’re leaning into that opportunity,” Grunberg told BetaKit in an exclusive interview.
But Storytime has made a few tweaks for Fund II, including working to ensure it has the flexibility to back more ideation-stage startups and the capital and capacity to “really double down” on its top-performing portfolio companies—two lessons from its first fund.
“We’ve got some winners in Fund I,” Grunberg said. “We’re handcuffed to how much we can double down into them, and that’s a frustration.”
Grunberg, who previously co-founded Montréal healthtech scaleup AlayaCare, teamed up with longtime Westdale Properties vice-president of real estate and angel investor Ryan Kimel to create Storytime in 2022. Today, Grunberg leads Storytime with Kimel and Epstein as GPs.
The firm has invested in 15 startups to date via Fund I, amassing a portfolio including startups like Vancouver-based Blanka, which helps people start their own makeup and skincare lines, Ottawa customer relationship management startup Bloks, Calgary-based leadership software provider Monark, Toronto AI patent search company NLPatent, Markham-based commuting platform Hop In Technologies, among others.
Storytime focuses on companies developing tech that helps people and companies do their jobs, find work and workers, and manage employees, spanning everything from business software to products that support gig and fractional work, creators, and solo-entrepreneurs.
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Grunberg acknowledged that getting to this point amid current market conditions was a tough lift, but said he is proud of this result. “We saw LPs that we had committed have to walk away before a call or defer,” he said. “People’s liquidity, people’s access to capital, people’s concern over their industry has impacted our ability to raise, [but] we hit a great number despite that.”
He attributed this to Storytime’s focus on tapping non-traditional VCs, as well as the community that the firm has built around the fund—something he emphasized that he hopes to maintain as Storytime continues to grow.
The makeup of the limited partner (LP) base for Storytime’s second fund looks similar to its first. Thirty-one individuals and no institutions have contributed to Fund II so far, including a mix of new and returning high-net-worth tech entrepreneurs and business leaders from outside tech with an interest in the firm’s thesis (for context, Storytime’s first fund had 78 LPs). Storytime leverages this group for deal flow, diligence, and portfolio company support.
Fund II investors include returning LPs AlayaCare co-founder and CEO Adrian Schauer, AI expert Louis-Martin Rousseau, and ex-Shoplogix president and CEO Martin Ambrose, and new backers like Creative Destruction Lab founding partner Dennis Bennie, ex-Maverix Private Equity managing partner Michael Wasserman, and Clio co-founder Rian Gauvreau.
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“Building companies with Neil for over a decade, I was excited to back him in Fund I,” Schauer—who worked with Grunberg at AlayaCare and Vortex Connect—said. “The strong performance of Fund I’s portfolio has me even more excited to jump in on Fund II.”
For his part, Bennie said he was attracted to Storytime’s “robust network,” its ability to produce quality deal flow, and capacity to provide support to portfolio companies beyond just capital.
Grunberg credited the VC experience and network Epstein brings to Storytime.
Epstein, who had been supporting Fund I as a venture partner on a part-time basis since June 2023, joins Fund II as a GP. Epstein told BetaKit that she was initially attracted to Storytime’s focus on the future of work, as well as the firm’s culture, founder focus, and community.
Grunberg said that Epstein has helped Storytime “immensely” over the last two years, crediting the VC experience and network she brings to the firm, and he expects her to bring provide more value to Fund II in an expanded role. Epstein described the move to partner as “a natural solidification” of her relationship with the firm.
“During that time, my excitement for Storytime has only grown,” Epstein said. “I’ve also seen how our strengths fit together: Ryan’s investment expertise, Neil’s deep operating experience, and my background in [VC] and law.”
The VC firm plans to write cheques of between $750,000 and $1.5 million through Fund II, which now gives it the capacity to invest as much as 10 percent of the fund in a single company. Storytime expects the majority of its deals to be in Canada, with additional investments in the United States and the Middle East.
Feature image courtesy Storytime Capital.