MaRS IAF launches Graphite Ventures, a new $100-million venture-capital fund

MaRS IAF launches Graphite Ventures, a new $100-million venture-capital fund

As an evolution of the MaRS IAF, Graphite Ventures will unlock new capital for early-stage companies and help them scale.

Capital is essential to the survival of any small business. This is particularly true for Ontario’s startups, which do the expensive work of tackling society’s biggest challenges. These companies operate in many fields, developing high-tech solutions that can do things like relieve crowded emergency rooms, train front-line workers and provide flexible and reliable energy storage. And they also tend to create well-paying jobs at a faster rate than other enterprises.

To further Ontario’s thriving innovation ecosystem of startups, the MaRS IAF team today announced the launch of Graphite Ventures, and a first close of $77 million in the Graphite Investment Accelerator Fund IV (Graphite), a new private-sector, venture-capital fund that will equip early-stage Canadian ventures with seed and pre-seed capital. The fund was kickstarted through proceeds from the MaRS IAF fund, as well as a consortium of private institutional and entrepreneurial investors and is projected to reach $100 million this year.

“Ontario has the brightest minds, world-class post-secondary institutions and a high-potential startup community that needs access to capital in order to grow,” says Vic Fedeli, Ontario’s minister of economic development, job creation and trade. “Graphite will inject at least $100 million into our early-stage venture capital ecosystem and help to support domestic talent and businesses as they continue to contribute to Ontario’s economic recovery.”

Graphite Ventures is an evolution of the MaRS Investment Accelerator Fund (IAF). Created in 2008 with provincial money, MaRS IAF has a proven track record of success, with industry-leading returns on par with Canada’s most successful private firms. The fourth-most-active venture capital fund in the country, MaRS IAF has supported 175 ventures, generating $1.7 billion in private-sector follow-on funding and creating more than 5,500 jobs.

MaRS IAF will continue to manage its existing portfolio; the fully-private Graphite Ventures will build off this progress and apply the team’s disciplined investing approach at the seed stage with new companies.

“Seed-stage financing for startups continues to be a critical need in Ontario,” says Lance Laking, general partner of Graphite Ventures, noting that this new funding, Graphite Ventures will also be looking to invest in promising Canadian tech companies based outside of Ontario.

“We’re excited to leverage our proven track record into a new fund that supports the strategic interests of the province and the innovation ecosystem.

The government is reinvesting $25 million of its proceeds from the MaRS IAF returns accrued since 2007. The goal of this funding model is twofold: employ the established monetary success and ecosystem expertise of the MaRS IAF team, while unlocking greater value for seed-stage ventures.

Graphite and MaRS IAF is concentrating on sectors that have a disproportionate ability to benefit the prosperity and well-being of citizens, such as B2B SaaS, digital health, fintech, proptech and capital-efficient hardware. But the proof is in the portfolio. Here are five startups to watch as the province moves into a post-pandemic economy.


Dark Slope Studios enters the metaverse

What it does: Dark Slope is on a mission to reinvent entertainment using metaverse technologies, including virtual reality, augmented reality and motion capture. The company produces video games, television shows and other immersive forms of storytelling.
Why it’s important: This virtual world has the potential of becoming just as economically essential as the real one. Imagine paying for a movie with cryptocurrency; or attending a meeting in a photo-real 3D “space”; or giving kids NFTs via computer screens to play with. It’s already the early days of the revolution (even Barbie is offering digital art in the metaverse) and Dark Slope is on the front lines.


e-Zinc electrifies the energy market with amazing storage

What it does: e-Zinc has developed a novel electrochemical technology for storing energy in everyday zinc metal. Along with Graphite, the company has drawn investment from Chicago’s Energy Foundry and Emeraude Suisse Capital.
Why it’s important: Renewable energy — for cars, buildings and, really, everything — will be key alternatives to coal and petrol as Ontario greens itself. e-Zinc’s solution is low-cost (roughly 10 percent of that of lithium-ion batteries) and long-lasting (multi-day), laying the foundation for a future where energy markets are fully powered by renewables.


MedMe has just the remedy for weary pharmacies

What it does: MedMe’s software helps pharmacies complete administrative tasks, diversify revenue and engage customers, which in turn, provides more time for virtual and in-person care. The product is currently used by pharmacists working with big retailers, such as Rexall, Pharmasave and Guardian.
Why it’s important: We generally think of pharmacies as a place to pick up drugs; a necessary stop after a visit with the doctor. This venture, however, allows pharmacies to help relieve the larger healthcare system while making more money. Online booking, pre-screening and detailed calendars and automated follow-ups, for example, ensure more people served and shorter wait times. Video calls and databases of patient preferences foster better customer experience. Consent-capturing tools for clinical services, use of data and auditing are quick and standardized. Serving 3,000 pharmacies across nine provinces, MedMe has been a huge help in the quick and easy booking of COVID-19 and flu vaccines.


Welbi brings new life to senior living

What it does: Welbi helps retirement and long-term care homes deliver enjoyable living experiences to its residents. The company’s software (compatible with existing programs on the market) includes up-to-date profiles on residents’ wants and needs; tools to organize and prioritize tasks; recreation planning; real-time recommendations; and contact tracing in case of viral outbreaks.
Why it’s important: Elderly people, especially those living in long-term care homes, have disproportionately suffered throughout the pandemic. Ensuring care for Ontario’s seniors will be a massive challenge going forward, as the government predicts that citizens over the age 65 will represent 22.2 percent of the population by 2046.


ProNavigator has built a sure-fire search engine for insurers

What it does: ProNavigator’s A.I.-fuelled system quickly withdraws and analyzes information buried deep within the portals and drives of insurance providers. From one command centre, agents can manage all necessary data — underwriting manuals, job aids, process manuals, bulletins, etc. And the machine “speaks” the language of insurance, understanding acronyms, policy and even the intent behind words.
Why it’s important: The insurance sector greatly lags when it comes to both employee and customer experience. ProNavigator claims that, on average, a staff member will waste up to one hour per day searching for information and putting customers on hold. The company’s tech solves this problem, bringing long-overdue ease and efficiency to insurance dealings.

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