Canadian VC holds first fund close

Dan Primack

Yaletown Venture Partners knows that seed-stage technology companies in Western Canada have been historically hamstrung when looking for capital. Now, after over a year of fund-raising, the Vancouver-based firm is almost ready to lend a hand.

Yaletown recently closed on US$21.9 million for its inaugural fund, and hopes to add another $7 million to $15 million by November. More than 80% of the capital comes from four major institutional players, including British Columbia Investment Management Corp. and the Canada Pension Plan (via Toronto-based fund-of-funds manager EdgeStone Capital Partners). The rest came from firm management and affiliated individuals like Redlen Technologies CEO Glenn Bindley and Fractal Capital President Haig Farris.

Yaletown has not yet added a portfolio company, but has around 100 possibilities in its pipeline. The first deal is expected to close around the end of September.

"There are basically three major incumbent venture firms in our geographic scope of British Columbia and Alberta," says Mike Satterfield, one of four Yaletown partners. "Our goal is to consistently be the earliest player."

He adds that company location and stage will predominate Yaletown's investment criteria, but that industry sector also will play a strong role. Specifically, the firm hopes to back companies in both the information technology and energy technology space. The former is defined broadly, and includes everything from security technologies to wireless and pervasive computing. The latter is a bit more specific, with a particular focus on fuel cells and the electricity market.

In addition to Satterfield, Yaletown partners include: Steve Hnatiuk, formerly of TD Bank and PricewaterhouseCoopers; Hans Knapp, former vice president of investments at Brigill Investments; and Kirk Washington, former director of corporate development at Ballard Power Systems. The firm's office also features an entrepreneur-in-residence named Irfhan Rajani, who co-founded both Telebackup Systems (acquired by Veritas Software) and jaalaM Technologies, on which he still serves as chairman.