The Nova Scotia First Fund, the venture capital fund administered by Innovacorp, invested just over $7.9 million in the year ended March 31, 2018, compared with $8.6 million the previous year.
Innovacorp, the Nova Scotia Crown corporation that makes early stage VC investments, released its 2017-18 Accountability Report over the summer, showing an active year with 17 equity investments in 16 companies.
The year was a significant one for Innovacorp as the NSFF booked a gain of about $6 million from the exit of portfolio company Kivuto Solutions, and Malcolm Fraser took the helm as CEO, replacing Stephen Duff. The fund had received a $40 million funding from the provincial government in late 2016.
“Innovacorp continues to be a vital partner in Nova Scotia’s strategy for economic growth,” said the report. “A robust startup ecosystem is key to achieving a strong economic future for Nova Scotia and Atlantic Canada – and Innovacorp is helping build that ecosystem.”
Innovacorp said its investment in the 2017-18 fiscal year included $6.7 million in follow-on funding for seven existing portfolio companies, adding this “reflects the maturing nature of Innovacorp’s portfolio.” Furthermore, it committed about $1.3 million to nine pre-seed or seed-stage companies, eight of which are new to the portfolio.
The following is a summary of Innovacorp's VC investments in the last fiscal year:
Appili Therapeutics -- $2 million over two transactions;
Dash Hudson -- $1.26 million;
Proposify -- $1.2 million;
SkySquirrel Technologies (now VineView) -- $999,000;
Spring Loaded Technology -- $510,000;
Covina Biomedical -- $500,000;
Swept -- $400,000;
Ubique Networks -- $300,000;
Alentic Microscience -- $252,000;
And NeoThermal Energy Storage -- $100,000.
Through its fund allocation that targets acceleration program graduates, Innovacorp made $400,000 in investments in the following six startups: Swell Advantage, Side Door, Dugo, Guild, Harbr and Securicy.
According to the report, Innovacorp made its $7.9 million in investments in concert with $31.9 million from other investors, most of whom were from outside Nova Scotia. “This represents a leverage ratio of 1:4.01, which exceeds Innovacorp’s weighted portfolio target ratio of 1:1.8,” said the report.
In February 2017, Innovacorp portfolio company Kivuto Solutions was acquired by Legado Capital. Innovacorp had invested $601,950 in Kivuto and received a payback of $7.4 million, representing a return of 12.4 times and an internal rate of return of 16.5 percent.
About $6 million in distributions were generated by NSFF in 2017-2018, primarily from proceeds from the Kivuto exit. Overall, the value of the portfolio increased by $8.8 million, driven by distributions received and the net impact of unrealized valuation changes in portfolio investments.
Since 2011-2012, Innovacorp has invested $42.4 million in 50 early stage companies. Revenue and employment generated by portfolio companies in 2017-2018 was $50 million and 550 jobs.
As well as its VC activities, the Accountability Report also said the agency oversaw a range of acceleration programs throughout the year, including: the Early Stage Commercialization Fund; the Spark competition; the Cleantech Development Program; the Medtech Accelerate Program; the Cleantech Accelerate Program; the Demo at Sea Program; the Early Adopter Program; the OceanTech Development Program; and the Blue Solutions Start-Up Challenge.