Relay Ventures Stokes Canada Tech Surge With $150 Million Fund

(Bloomberg) -- Relay Ventures, one of Canada's best-known venture capital firms, is on the lookout for new investments on both sides of the border after replenishing its cash pile with a new $150 million fund.

Founders Kevin Talbot and John Albright are aiming to make early-stage investments of around $500,000 to $4 million in startups based out of Canada or the U.S. They have already invested in companies including education tech firm FreshGrade and restaurant software startup 7shifts.

Canada's tech industry has taken off in the last several years, with bustling startup scenes in Montreal, Toronto, Waterloo and Vancouver attracting record amounts of venture capital from both home and abroad. Even as the U.S. venture capital market slows down, Canada's is still growing, with C$1.5 billion ($1.1 billion) invested in the first half of 2016, compared with C$1.1. billion a year earlier, according to the Canadian Venture Capital Association.

The fund, which is Relay's third since 2008, saw investment from major Canadian financial institutions including Royal Bank of Canada and the Caisse de Depot et Placement du Quebec, the province's pension fund. Still, the largest of Canada's institutional investors, including the Canada Pension Plan Investment Board, are largely absent from venture capital.

“We still don't see the realities of the U.S. market reflected in Canada,” Talbot said during an interview in Toronto. “We don't have anywhere near the pension funds, we don't have the endowments, which tells you how far Canada still has to go.”

To contact the reporter on this story: Gerrit De Vynck in Toronto at gdevynck@bloomberg.net. To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Carlos Caminada, Michael B. Marois