Boris Wertz, founding partner of Version One Ventures, at his office in Vancouver, B.C. in October, 2015.DARRYL DYCK/The Globe and Mail
One of the country’s top-performing venture capital firms has raised two funds as it increasingly looks outside Canada for opportunities to back promising entrepreneurs.
Seed-stage investment firm Version One Ventures is set to announce Tuesday it has closed its fifth main fund after raising US$78-million. It has also raised its third opportunities fund, a US$30-million vehicle that doubles down on its most promising early bets.
Version One last raised capital in 2021, bringing in US$70-million for its fourth fund, as well as closing a US$30-million opportunities fund. Investors in the latest funds include long-time backers Northleaf Capital Partners and HarbourVest Partners in Canada, plus newcomer Vintage Investment Partners of Israel and a U.S. endowment fund.
The firm, co-led by Vancouver-based founding partner Boris Wertz and general partner Angela Tran in the San Francisco area, was an early investor in digital marketplaces and the software-as-a-service space, booking big investment gains on Canadian companies Jobber, Clio and Ada.
Tech founders leaving Canada at accelerating rate, survey finds
It moved relatively early into crypto in the mid-2010s, investing in Dapper Labs, Uniswap and Ether.Fi, and becoming one of the few Canadian financiers to score big on the April, 2021, initial public offering of Coinbase Global Inc.
Version One made a $2-million investment in the cryptocurrency exchange out of its $35-million 2014 fund. Its Coinbase investment expanded in value so much that by the time Version One distributed those shares in the company to its investors, they were worth 1.7 times the size of the entire fund.
Most of its funds, dating to its first – an $18.7-million fund raised in 2012 – performed in the top quartile of their peers, and some in the top 10 percentile.
“Version One has been a defining force in Canadian venture capital for over a decade, bringing a global vision and conviction to the ecosystem at a time when patient, founder-aligned capital was in short supply,” said Senia Rapisarda, managing director with HarbourVest’s Canadian unit.
More recently, Version One has focused on artificial-intelligence infrastructure and applications, robotics and physical AI, biology and “deep technology” companies that require more advanced engineering solutions. It has recently backed entrepreneurs in India and in April, it announced its first investment in Africa, joining a financing of Nigeria-based super-app developer Swoop.
“Across these categories, a common pattern has emerged,” Version One said in a statement. “The founders we are most excited about are not simply chasing trends – they are deeply mission-driven people with unusual insight, long-term conviction and an almost obsessive desire to solve a problem they understand intimately.”
Canada used to account for half of Version One’s investments; that has dropped to about 10 per cent.
“There have been fewer startups coming out of Canada,” Mr. Wertz said in an interview, echoing recent findings that a growing number of Canadian founders have started or moved their companies abroad. “The early stage here hasn’t been as interesting the last few years,” he said, though he added he was more optimistic after witnessing “really great energy” during last week’s Toronto Tech Week.
Mr. Wertz said the proliferation of AI tool means “it has never been easier to start startups, but it also means that it’s getting more competitive. You need to have not only exceptional founders that can reinvent themselves and their company many times over but also be in a space that is not that crowded or competitive where there are 20 copycats.”
Version One has fared well as a generalist investor by being opportunistic and staying ahead of trends – though Mr. Wertz famously passed up the opportunity to invest early in Shopify and missed the fintech wave as the firm focused on crypto.
The firm is often investing in entirely different areas by the end of a fund’s deployment period than what it was highlighting to investors when it raised the money, Mr. Wertz said.
“Over three to four years everything moves so quickly and new things emerge so you continuously have to revaluate what is interesting, where there is traction, where is the frontier. The moment you as a founder or an investor think you’re following a playbook, that is not going to work out. All success is in the outliers.”