TORONTO — A venture capital firm is opening an office in Waterloo, in a first for the industry, as it bets that the birthplace of BlackBerry can foster the next generation of Canadian technology companies.
Montreal-based iNovia Capital is moving one of its partners to the Waterloo Region, according to managing partner Chris Arsenault.
“Adding feet on the ground in Waterloo is just a natural, normal evolution of building our relationships and our presence where it’s the most important,” Arsenault said.
Waterloo Region has become a hub of startup activity. It has pumped out more than 1,700 tech startups in the last five years and more than $500 million has been invested in the companies, according to Communitech, the association that runs programs for the local technology sector.
“We know the talent is here,” said Arsenault. “If we give an incentive for people to stay and actually build companies that matter, why can’t we just go out and do it?”
INovia, which has $300 million under management, has 42 companies in its portfolio, several of which are from Waterloo. The firm invested in shipping service BufferBox, which was bought by Google Inc. in 2012, and also has invested in Tulip Retail and Vidyard.
Engineers and entrepreneurs who may have left for Silicon Valley or New York in the past are choosing to stay and many are coming back after gaining experience in the U.S., according to Arsenault.
Waterloo still faces some challenges, including a lack of transportation infrastructure, said Iain Klugman, chief executive officer of Communitech. More rail service is needed to speed links to Toronto, he said.
Still, the region is getting attention from the international technology community, Klugman said. He’s seeing interest from U.S. venture capital firms who want to set up offices in the region, declining to say specifically which ones.
“VCs need to believe they’re missing out on deals by not being here,” said Klugman. “A lot of other VCs will look at this decision and say, ‘It’s time that we had a presence in that community.'”
Waterloo Region Record
By Gerrit De Vynck
Bloomberg with files from Record staff