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Pender Ventures raising $100m for second venture fund

Firm found success investing in B.C. companies Copperleaf and Jane
Pender Ventures' management team is involved selecting target companies to invest in | Pender Ventures

Vancouver-based Pender Ventures has raised $50 million of an expected $100 million for its second venture-capital fund and has so far made several technology investments.

News of the money source comes as funding for early-stage B.C. technology companies has been on the wane, thanks in part to rising interest-rate hikes and more investor wariness about where to place money. 

It revealed that its fund has so far invested in three target companies:
•Traction Rec; and
•Traction Complete.

Managing partner Maria Pacella said that the exact amounts invested in those ventures is not public information, but that most of the fund’s $50 million remains available.

She said her aim is to place money in 10 to 14 companies as the fund increases in size to $100 million.

“It’s a 10-year fund and we intend to invest roughly 50-per-cent to 60-per-cent in the first four to five years,” she said. “We will then reserve the rest for the next five years.”

Pender Ventures launched its first venture-capital fund in 2018 – a $25 million pot of money that invested in nine companies, including six from B.C., Pacella said.

The company’s data show that that initial fund’s internal rate of return was above its 25-per-cent to 30-per-cent annual target.

Driving that performance were investments in B.C.’s Copperleaf Technologies Inc. (TSX:CPLF) and Jane Software Inc. Another standout was B.C.’s Clarius Mobile Health, Pacella said.  

The second fund seeks to invest in health-technology ventures – specifically business-to-business (B2B) software companies that improve healthcare delivery. That includes technology for clinical-decision support and software for drug development and patient data management.

The other major focus for the second fund will be vertical software-as-a-service (SaaS) companies, especially ones that address well-defined problems, have identified target customers, operate in markets that are less competitive and have clear paths to profitability.

Investors in the fund that also invested in Pender Ventures’ initial fund include Export Development Canada and Vancity. New investors include Bank of Montreal Capital Partners, Kinsted Wealth, Canadian Imperial Bank of Commerce (TSX:CM), Pender Growth Fund and many more.

Pacella said that she expects that more new investors will come forward as the fund increases in size up to $100 million.

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