This interview will appear in the 3Q Y2015 (October 2015) issue of the Sovereign Wealth Quarterly.
This is a Q&A with Jim Orlando, Managing Director of OMERS Ventures
1. How would you differentiate the Canadian venture capital community with Silicon Valley?
Silicon Valley is Silicon Valley. Every other ecosystem is going to be compared to it, and each one will be completely different from the culture and community that has been established in that cluster. Strong but smaller ecosystems in Canada – for example Toronto/Waterloo, Vancouver, Montreal, etc. – are complete with world-class talent, revolutionary leaders, and companies that are changing the face of tech every year.
As such, the battle is real for venture capitalists to find and invest in top startups. There is certainly no shortage of funding for great companies, and in such a crowded space, VCs are increasingly looking at ways to bring more to the table in order to appeal to the best ones; great competition and coopetition.
The tech ecosystems that exist in Canada are tight-knit communities – bursting with incubators, accelerators, events, meet-ups, workshops, seminars and other collaborating platforms to encourage and motivate entrepreneurs and companies of all sectors.
Top Venture Capital Sectors in Canada – First Half of 2015
|Sector||Deal Amounts||Millions in CAD|
|Information & Communications Technologies||161||547|
2. Venture capital is a challenging asset class which requires strong networks and acumen. Why did OMERS form OMERS Ventures?
When OMERS Ventures was founded in 2011, it was evident that venture funding was lacking considerably in Canada, particularly for later stage companies. After the financial crisis, venture was seen as being “too risky” to be a viable investment strategy. Due to the lack of funding, Canadian tech companies had no choice but to sell themselves to bigger players, instead of being able to further develop their business models and offering.
OMERS Ventures was founded with the strong belief that investments in the technology startup ecosystem can provide meaningful returns. We have an incredibly strong team with a breadth of experience, business knowledge and global connectivity, which allows us to be competitive and successful in such a dynamic asset class.
3. In which types of startups is OMERS Ventures interested? What stage?
We are primarily focused on investments in the technology, media and telecommunications sectors in Canada and the U.S. We take a relatively broad view of these sectors, focusing on companies with global target markets and a strong ability to scale their businesses to meet market demand.
We are lifecycle investors and we invest in all stages of the lifecycle of a company. Our investment strategy is long-term, and we have the resources and flexibility to support our investment partners throughout the various growth stages of their business.
The single most important thing we look for in CEOs is passion.
OMERS Venture Portfolio
|LeadSift||Halifax, NS||It is a social intelligence platform that helps brands reach in-market consumers through intent data, actionable insights and bigger audiences.|
|Busbud||Montreal, QC||The startup is a global coach travel-booking platform.|
|Hopper||Montreal, QC||Airfare predictions|
|Fusebill||Kanata, ON||Recurring billing and subscription management software for businesses|
|Sweet Tooth||Kitchener, ON||Creates powerful loyalty programs for retailers|
|Vidyard||Kitchener, ON||Video marketing platform|
|D2L Corporation||Kitchener-Waterloo, ON||Formerly Desire2Learn. Education technology|
|Klipfolio||Ottawa, ON||Software company building an online dashboard platform|
|Ranovus||Ottawa, ON||Provider of interconnect solutions for data center and communications networks|
|Shopify||Ottawa, ON||Develops computer software for online stores and retail point-of-sale systems|
|360incentives.com||Whitby, ON||SaaS-based platform that enables manufacturers and distributors to manage their incentives programs|
|Highline||Toronto, ON||Formerly called Extreme Startups|
|InteraXon||Toronto, ON||Computing firm that creates hardware and software platforms to convert brainwaves into digital signals|
|League||Toronto, ON||Mobile health startup focused on wellness|
|Pressly||Toronto, ON||Content curation platform|
|Wattpad||Toronto, ON||A writing community in which users are able to post articles, stories, fan fiction, and poems, either online or through the mobile app|
|Wave||Toronto, ON||Formerly Wave Accounting. Company makes online small business software products|
|BuildDirect Technologies Inc.||Vancouver, BC||Online building materials and home improvement products retailer|
|Hootsuite||Vancouver, BC||Social media management system|
|Visioncritical||Vancouver, BC||Company provides a cloud-based customer intelligence platform that allows companies to build engaged, secure communities of customers|
|Mojix||Los Angeles, CA||Designs and manufactures signal processing technology systems|
|DogVacay||Santa Monica, CA||Online dog-sitting community|
|PasswordBox||Acquired by Intel. Password manager service|
|AppHero||Acquired by Fuse Powered Inc.|
Source: OMERS Ventures and listed portfolio companies
4. Is there potential collaboration between OMERS Ventures and OMERS PE? For example, when a startup gets big enough for a potential merger?
Being part of the OMERS group of companies is a fantastic differentiator for OMERS Ventures. When and where necessary, we can leverage the resources of that broad family to help the Ventures’ portfolio companies grow and succeed. We have many instances of collaboration between the various entities – for example one of our investees recently sold their enterprise software capabilities to the OMERS IT organization. We will continue to seek abilities for this type of mutually beneficial business cooperation.
5. In April, OMERS Ventures participated in a Series D round in Mojix. What attracted you to this particular startup?
Per our investment strategy, we look for companies that have built a competitive advantage in markets that are set for sustained growth. Mojix has clearly demonstrated this, and we believe there is tremendous opportunity for the company to realize the vast potential of the wireless sensor networks and the Internet of Things. We believe we are in the early days of what Mojix will be able to achieve, and we are extremely excited to be part of the journey.
6. It seems like you had success with your investments in Hootsuite and Shopify. What traits do you look for in startup CEOs?
The single most important thing we look for in CEOs is passion. Growing a company is incredibly challenging with many moving parts and obstacles along the way. In order to keep true to the vision, overcome challenges and grow the business, you need to be fueled by the fiery passion to solve a particular problem in the marketplace. Passion will be your biggest motivator, and provide the determination to succeed. Everything else is secondary.
7. Can OMERS Ventures accept to manage third-party capital such as from an endowment or sovereign wealth fund?
As you may have seen in our recent Fund II announcement, OMERS Ventures is managing capital from OMERS, Cisco Investments and BMO Financial Group. This could be the first time that a pension fund entity has acted as a General Partner in this capacity in any asset class.
8. What can Canada do to convince budding entrepreneurs to stay up North rather than head to Silicon Valley?
There are so many reasons why Canada is a great place to build a company!
The tech ecosystems that exist in Canada are tight-knit communities – bursting with incubators, accelerators, events, meet-ups, workshops, seminars and other collaborating platforms to encourage and motivate entrepreneurs and companies of all sectors. So many of these community members are highly educated and talented individuals – fuelled by Canada’s great education system with stellar business and engineering schools.
Companies can also take advantage of foreign exchange gains. By operating in Canada, most of a company’s expenses would be in CAD dollars – development, research, marketing, etc., and then enjoy higher USD revenues when selling their product or service south of the border.
Arguably most important, there’s no lack of funding for great companies. For a startup, there are plenty of quality funders at the table: venture capitalist, angels, incubators, and bank loans…to name a few. The Canadian government is also extremely supportive of startup companies, providing plenty of capital and tax incentives to stimulate growth. If you have a great company, there’s plenty of money to be found.
About Jim Orlando
In his role as Managing Director of OMERS Ventures, Jim Orlando is responsible for leading investment activities in the North American market focusing on high-growth companies in the technology, media, and telecommunications sectors. With more than 14 years of experience in the venture capital and private equity sectors, Jim has a strong track record of finding deals, closing investments, and in working with strong founders, CEOs and management teams on the ongoing development and growth of their businesses.
Prior to joining OMERS Ventures, Jim was a Managing Director at OMERS Private Equity, which directly owns and actively manages a diversified, multi-billion dollar portfolio of investments in North America and Europe.
Prior to that he held key roles with Bell Canada Ventures and Battery Ventures in Silicon Valley, and also has ten years of operational experience in the telecom industry.
Jim holds Bachelor of Computer Engineering and Management, and Master of Electrical Engineering degrees from McMaster University.
Sovereign wealth funds have increased their appetite for healthcare-related investments, according to a recent report issued by SWFI research. Johnson & Johnson (J&J), for a while, have been contemplating on possibly selling its diabetes care businesses. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
This longer-than-normal episode covers a wide range of issues including such as sovereign wealth funds, bitcoin, cryptocurrencies, Indian real estate, ESG, investment exclusions, central banking and more.
The views in this media are expressed by Michael Maduell and other participants and are not reflective of the Sovereign Wealth Fund Institute (SWFI).
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