Thomson Reuters has launched its second corporate venture capital fund with $150 million USD ($215 million CAD) to invest in early-stage technology companies.
Much like its initial fund, Thomson Reuters Ventures (TRV) Fund 2 will target Series A investments with “flexibility to explore earlier and later-stage opportunities,” the company said in a statement. Both TRV funds invest in technology companies that operate in many of the same spaces its parent company does: legal, tax, accounting, risk fraud and compliance, media, and financial technology markets.
The new fund, which is fully sourced from Thomson Reuters’ balance sheet, has yet to deploy any capital, but a “couple of deals” will close in the first quarter of 2025, TRV managing director Tamara Steffens told BetaKit in an interview.
“Provided that our investments are doing well, we certainly stick with them.”
Steffens said that TRV is sticking with the same strategic focus for Fund 2 because they’re familiar with it and, from a venture perspective, TRV is looking for the next generation of technology to learn from and partner with. While she said TRV doesn’t require the use of artificial intelligence (AI), it tends to be a fit.
“Particularly in the three areas of tax, legal, risk and fraud, those areas are perfect for AI,” Steffens said. “We tend to see a lot of newer companies that are using AI [that is] native to the way they designed the product, which is a very good fit for our categories and where we’re going.”
Steffens anticipates making 20 to 25 investments from Fund 2 over the next three years, with cheque sizes ranging from $4 million USD to $7 million USD, and some funds allocated for follow-on pro rata investments.
“Provided that our investments are doing well, we certainly stick with them,” Steffens said. “We’re not one and done.”
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The Toronto-based business information services giant launched its venture capital arm with its first $100-million USD fund in 2021 to support the ecosystem of early-stage companies operating in its focus areas.
A total of 23 investments were made through the first fund, which currently has funds set aside for follow-on pro rata investments, Steffans said, but declined to disclose how much. She added the first fund is performing well based on the stage that it’s at but, given it invested in early stage companies, TRV won’t see the results for seven to 10 years.
The fund has seen one exit so far, albeit a self-induced one. Thomson Reuters acquired New York, NY-based Materia AI this past October, just months after TRV invested in its seed round. While Steffens said she doesn’t anticipate acquiring a majority of their portfolio, it is a pipeline for Thomson Reuters to get to know if a company is a good fit.
Feature image courtesy Thomson Reuters.