Georgian Partners isn’t the only one | BetaKit

It was only a matter of time.

The Globe and Mail said the quiet part out loud on Friday, with new reporting from Sean Silcoff indicating Georgian Partners—Canada’s largest independent VC firm with $5.6 billion USD in assets under management—wrote down 28 investments in 21 companies across five funds, representing a whopping $430-million USD loss in value.

After a quick review of the group chats over the weekend I can confirm no one is happy. With prominent US LPs and a majority of its investments south of the border, Georgian might be the most recognizeable Canadian VC name outside of Canada, and such news tarnishes the collective brand. 

More importantly, Georgian’s LPs—BDC, EDC, CDPQ, Kensington, Northleaf, Teralys, etc.—are also prominent LPs in most other Canadian VC firms. Poor performance from Canada’s largest independent venture firm has ripple effects, and might add context to why this year is the worst in a decade for VC fundraising.

So yes, the macro is bad but it should also be completely expected. The collective post-pandemic fever dream that presaged the end of the ZIRP era is well documented. And any firm that secured just under $2 billion USD to deploy right when rounds were closing at 20-25x revenue should expect their book value to drop when those revenue multiples return to reality (ignore AI for the moment).

BDC, Canada’s other largest investor by AUM, just wrote down its VC portfolio last month. I don’t think anyone can reasonably argue that BDC and Georgian are the only two Canadian firms having frank conversations with their auditors right now.

Let’s jump to the micro for a second to connect it to the macro. BetaKit has written previously about VC/LP issues negatively impacting Canadian startups, even contributing to their demise. Our Alex Riehl also dropped new reporting on Friday, which you can read below, about the ongoing struggles of Toronto-based FreshBooks to reach profitability. One source pointed to the pressures of finding revenue growth after securing so much venture capital. The Canadian investor in FreshBooks’ Series A and B rounds? Georgian.

I’m in Vancouver this week for BetaKit’s latest Town Hall (our amazing speaker list is also below). If you’re in town but can’t make the event, drop me a line and we’ll grab a coffee and talk fund performance.

Douglas Soltys
Editor-in-chief

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TOP STORIES OF THE WEEK

Meet the BetaKit Town Hall: Vancouver speakers

BetaKit is happy to announce five BC leaders who will provide a candid pulse check on the opportunities and challenges facing the West Coast tech sector at BetaKit Town Hall: Vancouver this Tuesday.

Make sure to secure your ticket while they’re still available!

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Inside FreshBooks’ struggle to reach profitability

“The next five years will be focused on scaling globally,” FreshBooks founder and board chair Mike McDerment told BetaKit in early 2021, eight months before securing a unicorn valuation.

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Information VP forgoes fourth fund in favour of SPV-style investing

After recently taking a step back to consider its options amid a particularly tough VC fundraising environment, Information VP has decided to invest more selectively in later-stage B2B FinTech and enterprise SaaS startups on a deal-by-deal basis.

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New funding for Kepler and Wyvern headline busy month in Canadian space tech

It’s been an eventful month for Canadian space tech as companies like Wyvern, Kepler Communications, Mission Control, and Volta Space Technologies prepare for take-off with new partnerships and rounds of funding.

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SAAS NORTH puts AI’s impact under the microscope

Has artificial intelligence truly made software platforms smarter? What results is it driving for Canada’s SaaS companies? And, most importantly, can it be trusted?

If you’re late securing your spot, BetaKit still has your hookup. You can save 25 percent on tickets to SAAS NORTH 2024 by using the code BETAKITSN24 at checkout. We’ll see you there!

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Mark your calendar! 

#MaRSClimateImpact runs Dec 3 & 4. Join us for two days of expert panels, venture showcases, and deep dives into climate innovation and action. 

🌱Register now! 

Funding, Acquisitions, and Layoffs

VAN – Hong Kong billionaire purchases $81M CAD stake in Well Health
EDM – Wyvern secures $8.2M CAD strategic investment
ON – Ontario reveals $146 million CAD next phase of life sciences strategy
TOR – Fable raises $33.8M CAD Series B round
TOR – NCC commits $22.8M CAD to 37 cybersecurity projects
TOR – Kepler Communications secures $20M CAD in federal funding
TOR – Round13 Capital to acquire venture debt platform TIMIA Group
MTL – Blockstream raises $289M CAD in convertible note financing
MTL – Deck raises $6.2M CAD seed round
MTL – Trustii raises $2.8M CAD seed round

The BetaKit Podcast

Does Canada have the leverage to regulate Big Tech?

“We just don’t have the clout to be able to successfully push policy on top of these platforms without cooperation or partnership from other countries.”

Former Google Canada and Twitter Canada exec Rory Capern joins to discuss the ongoing US Big Tech antitrust cases, the state of social media and digital advertising, and what recourse (if any) Canada has to move forward effective regulation.

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Take The BetaKit Quiz

Think you’re on top of Canadian tech and innovation news? Time to prove it. Introducing The BetaKit Quiz, a new weekly challenge dropping every Friday.

This week: industrial espionage, VC shake-ups, and RuPaul’s Drag Race.

Take The BetaKit Quiz for Oct. 18, 2024.