Lacavera Returns to Startups With C$100 Million Canada Tech Fundby
Wind Mobile founder becoming a force in country's tech scene
Plans to close venture capital fund by the end of 2016
Tony Lacavera, the Canadian entrepreneur who created Canada’s fourth-largest wireless carrier after an eight-year odyssey, is diving back into technology investing by raising as much as C$100 million ($68.9 million) for a new venture capital fund.
He’s already made five investments in the last year with his own money, joining with with some of Toronto’s best-known tech investors in startups such as Kira Talent, Revlo and ChargeSpot. He’s a fixture at the city’s tech events and has sponsored some of its leading startup incubators, including OneEleven and MaRS. Now Globalive Capital, his venture capital firm, is in the process of raising funds from institutional investors and family offices.
“The Canadian ecosystem has really matured a lot and there is a lot of angel and seed investment available to Canadian entrepreneurs,” Lacavera, said. “The incubator and accelerator programs have matured a lot and there’s really high quality early stage deals available.”
Canada’s startup scene is bubbling. Venture-capital investing has doubled in the last five years to $2.4 billion, according to Thomson Reuters, and companies like Shopify Inc. and Kik Interactive Inc. are upending the stereotype that Canadians can’t build world-leading tech companies at home. Top U.S. venture capitalists like Sequoia Capital and Andreesen Horowitz have made investments in Canadian startups.
There’s still something missing though, Lacavera said. Canada has plenty of support for entrepreneurs just starting out, and once they make it big, U.S. venture firms or investors like Toronto-based OMERS Ventures are there to write checks in the tens of millions of dollars. Between those stages there’s a funding desert, he said.
“You see so many Canadian companies end up with majority U.S. ownership or majority international ownership because there aren’t Canadian-based funds that can really aggressively help accelerate growth,” he said.
Lacavera said he wants to help fill that gap by participating in funding rounds of C$5 million to C$25 million by contributing C$2 million to C$5 million. He’ll look for investments in the U.S. too.
Lacavera plans to close the new fund in 2016. Globalive would use the money to make follow-on investments in some of the startups that Lacavera already has a stake in, as well as look for new opportunities, he said. He declined to say how much he’s raised so far.
Lacavera, isn’t new to tech investing. Most of the companies he’s invested in over the years have been tech startups. In 2008, he founded Wind Mobile, an upstart wireless carrier in an industry dominated by three major players. It turned out to be a bigger challenge than he foresaw.
“I went into it incredibly naive about what the undertaking really was,” Lacavera said at an interview in Globalive’s offices in downtown Toronto. Wind faced several regulatory challenges, heavy competition from the country’s big three wireless carriers and a revolving door of investors.
In 2009, weeks before it was set to launch, regulators told Wind it couldn’t operate because its majority owner at the time, Egyptian billionaire Naguib Sawiris, wasn’t Canadian. The company had 700 employees and investors had put C$800 million into it, Lacavera said.
“I just kept telling our team, I kept telling the market, that we have a reason to exist,” he said. “But inside I was obviously thinking, ‘holy moly what did I get myself into?”’
Wind eventually worked its way through the regulatory challenges and now has a user base of almost 1 million. Last year, Lacavera hired veteran Canadian telecom executive Alek Krstajic and Calgary-based Shaw Communications bought the firm in December for C$1.6 billion.
Lacavera’s now a startup coach and investor at the University of Toronto’s Creative Destruction Lab, helping to turn scientific breakthroughs into money-making companies.
“He helped mentor us over six months,” said Mark Goh, CEO of ChargeSpot, which is developing technology to let people charge their phones wirelessly. “He had experience building up infrastructure so he obviously saw some new opportunities, some new ways to go to market.”
His experience of trying to disrupt an established market with Wind Mobile that will give Globalive an edge in helping the startups it’s invested in become world-leaders, Lacavera said.
“We’re operators and we’re going to invest in companies that are related to our existing operating experience,” he said. “When things don’t go exactly as planned, we know what to do.”