Teralys Capital on Track to Reach $570M Fund Goal by Year’s End

Teralys Capital, one of Canada's most prominent fund managers, has made a groundbreaking achievement by raising $475 million CAD for its Venture Capital Catalyst Initiative (VCCI)-backed fund, making it the largest amount ever raised for such a fund-of-funds backed by the federal government. The Montréal-based firm, however, is not done yet, as it sets its sights on reaching a hard cap of $570 million by the end of 2024. In a recent statement, Teralys Capital’s managing partner, Éric Legault, expressed optimism that the firm "should" meet this ambitious target within the year.

The significance of this fundraising milestone cannot be overstated. With backing from key partners such as the Government of Québec, through Investissement Québec, alongside major institutional players like Caisse de dépôt et placement du Québec (CDPQ), Beneva, Fondaction, Bpifrance, and leading academic institutions such as Concordia University, Polytechnique Montréal, and HEC Montréal, Teralys is positioned to be a key driver of Canada’s venture capital landscape. The participation of numerous Canadian entrepreneurs and family offices further underscores the strong confidence in Teralys's ability to deliver long-term returns while advancing innovation.

The firm’s VCCI fund, which has already committed 30 percent of its capital, will finance approximately 25 indirect fund investments and around 15 direct co-investments, focusing on sectors critical to the future economy. These include information technologies, life sciences, and clean or industrial innovations. As venture capital increasingly plays a pivotal role in driving innovation, these investments will help Canada stay competitive in industries that are not only vital to economic growth but also to the transition to a more sustainable, technologically advanced future.

The VCCI program, under which Teralys’s fund operates, is an important federal initiative managed by the Business Development Bank of Canada (BDC). It is designed to stimulate the Canadian innovation ecosystem by attracting private sector funds. Under the program, the federal government provides one dollar for every three dollars raised by private sector fund managers, with a specific focus on ensuring that Canadian venture capital funds have sufficient resources to invest in high-potential startups and growth-stage companies. This model has proven effective in mobilizing capital, and Teralys Capital’s success in raising the largest VCCI-backed fund to date further highlights the program's impact.

However, this fundraising success comes amid a challenging environment for venture capital. The economic landscape has seen increasing headwinds, making it difficult for many fund managers to secure large commitments. Reflecting on the broader market sentiment, Legault acknowledged that fundraising has been challenging, echoing the sentiments of many general partners (GPs) and limited partners (LPs) who spoke at Startupfest, a key event for the Canadian startup community. Despite these difficulties, Teralys Capital has demonstrated remarkable resilience, raising significantly more than other VCCI-backed funds, including Kensington Capital Partners and Northleaf Capital Partners, which closed their funds at $290 million and $370 million, respectively, earlier this year.

Teralys’s success speaks to its strong track record, established reputation, and the trust it has built among its investors. The firm is known for its strategic and disciplined approach to fund management, and its latest efforts to secure a $570 million fund align with its broader mission of supporting Canadian entrepreneurs and fostering the growth of innovative companies. By financing a diverse range of venture capital funds, Teralys is effectively enabling the development of a vibrant startup ecosystem across Canada, with the potential for global impact.

The firm’s focus on sectors such as information technologies, life sciences, and clean or industrial innovations positions it to play a key role in some of the most transformative industries of the future. These areas are not only central to technological advancement but are also critical to solving some of the world’s most pressing challenges, from climate change to healthcare innovation.

As Teralys Capital continues its fundraising efforts and allocates its capital across both indirect and direct investments, the firm is poised to make a lasting impact on the Canadian venture capital ecosystem. By backing funds that support early-stage and growth-stage companies, Teralys is helping to ensure that Canadian entrepreneurs have access to the capital they need to innovate and grow, thereby strengthening Canada’s position as a global leader in technology and innovation.

In conclusion, Teralys Capital’s $475 million fundraising achievement marks a significant milestone for the firm and the broader Canadian venture capital ecosystem. With the support of key institutional and private partners, Teralys is on track to reach its $570 million target, which will further enhance its ability to back innovative companies in critical sectors. As venture capital continues to evolve in response to market challenges, Teralys’s strategic approach and strong execution position it as a key player in the future of Canada’s innovation economy.