Northside Ventures Wraps Up First Early-Stage VC Fund with $15 Million CAD

Toronto-based venture capital firm Northside Ventures has successfully closed its inaugural fund, reaching its target of $15 million CAD (approximately $11 million USD) last month, despite challenging market conditions.

Northside’s Fund I LPs include a diverse group of institutional investors, funds-of-funds, corporate VC arms, other venture capital funds, family offices, and seasoned tech founders and operators. Notable LPs include prominent names such as Inovia Capital, Bain Capital Ventures, Intact Ventures, Notable Capital, Golden Ventures, FJ Labs, Bling Capital, Coolwater Capital, and Garage Capital. Additionally, the fund boasts over 50 individual LPs from companies like Google, Uber, Affirm, Deel, Rippling, Wave, and PointClickCare. High-profile investors among them include Kirk Simpson, former head of Wave Financial and now leading GoConfirm; Wayne Pommen, ex-PayBright executive and current leader at Affirm; Andrew Macdonald, Uber’s senior vice president; and George Babu, co-founder of Kindred.

Founded last year by solo general partner Alex McIsaac, who previously served as a Canadian partner at Germany’s Global Founders Capital, Northside Ventures focuses on early-stage investments. McIsaac identified a gap in institutional capital for Canadian founders at the pre-seed stage, where he believes there is a scarcity of funding. “That true pre-seed cheque that comes before the Golden Ventures invest is still pretty hard to find for founders, and so that’s the gap that I’m trying to fill,” McIsaac explained in an exclusive interview with BetaKit.

Northside Ventures targets startups based in Canada or the United States with at least one founder having a strong connection to Canada, focusing on sectors such as artificial intelligence, vertical SaaS, FinTech, and cleantech. The firm aims to engage in initial rounds of external funding, typically investing between $100,000 and $500,000 at the pre-seed and seed stages.

So far, Northside has deployed about 40% of its fund across 15 investments, including companies such as Datacurve, Switch, Terminal, and Veritree. Approximately two-thirds of the portfolio consists of Canadian companies, while the remaining investments are in Canadian founders operating in the U.S. The firm plans to make an additional 15 to 20 investments over the next one to two years, with at least half of these in Canadian startups.

Northside Ventures distinguishes itself with what McIsaac describes as an “institutional angel investor” approach. This methodology merges the advantages of institutional-grade funding with a founder-friendly, agile investment style. McIsaac’s experience working with startups and as an early-stage investor at Northwater Capital, BDC Capital, and Global Founders Capital informs this approach, which aims to combine rapid decision-making with a high level of support for founders.

Inovia Capital, a prominent limited partner (LP) in Northside Ventures alongside Intact Ventures, played a crucial role in the establishment of Northside's inaugural fund by contributing through its $34 million Discovery Fund. This fund is specifically designed to support emerging venture capital firms at the early stages of their development.

Prem Kalevar, the vice-president of the Inovia Discovery Program, emphasized the depth of the relationship between Alex McIsaac, the founder of Northside Ventures, and the Inovia Capital team. Over the years, McIsaac has cultivated a strong partnership with Inovia, marked by ongoing collaboration on various investment opportunities. This long-standing relationship has been instrumental in building trust and aligning interests, which was a significant factor in Inovia's decision to support Northside Ventures.

The collaboration between McIsaac and Inovia Capital has involved working together on several investments, reflecting a shared vision and strategic alignment. Inovia’s backing not only provides financial support but also signals confidence in Northside Ventures' approach and potential for success. This partnership underscores the importance of strong networks and relationships in the venture capital industry, contributing to Northside Ventures' ability to attract other investors and make a meaningful impact in the early-stage investment landscape.