In its first investment outside of Atlantic Canada, Build Ventures of Halifax has invested in InteraXon, a Toronto company developing a consumer product that operates off brainwaves.
The Atlantic Canadian regional venture fund has announced it’s joined an investment syndicate led by OMERS Ventures that invested $10 million in the Toronto company. Build accounted for $2 million of the Series B investment round. The other members include: Felicis Ventures, of Palo Alto, Calif.; Horizons Ventures, of Honk Kong; and Flextronics Lab IX, of San Jose, Calif.
Together, they are financing InterAxon’s drive to get its Muse headsets on to the foreheads of people across North America. Muse is a head band and online app that together monitor people’s brainwaves. The system can be used to help with relaxation and concentration and improve mental health, and is already being used by other companies and researchers to explore more products that react to mental activity. (I got to test and early prototype of Muse two years ago when reporting on the company for USA Today.)
Build Ventures Principal Rob Barbara said in an interview that his firm was attracted to the investment because of the InteraXon team and the chance to build relationships with the investors in the round. The team launched Muse in November and in just seven months it built up $3.5 million in sales. Barbara said working with the InteraXon team is a chance to witness and understand how to get a consumer product to the global market – valuable knowledge that with develop Build Ventures’ expertise and help it to work with Atlantic Canadian companies.
“This is a product that’s going to be distributed like all new major electronic consumer products and it’s very important that we gain experience at it,” said Barbara. “This summer it will be available in more than 500 retail outlets.”
He noted that InteraXon is led by a strong management team. CEO Ariel Garten has a wide-ranging background, including experience as an artist and neuroscientist. She’s backed up by two veterans of Blackberry – Chief Operations Officer Derek Luke and Executive Vice-President of Sales and Marketing Jacqueline Cooper.
Build has raised more than $60 million, and most of its funding has come from the four Atlantic provinces and from the federal government through the Business Development Bank of Canada. About 65 percent of Build’s funding comes from the Atlantic provincial governments, which means Build could invest as much as 35 percent of its capital in other places.
Barbara said the fund has always planned to make a few investments outside the region, because that is the best way to develop a deep, trusting relation with other funds. Those relationships, it hopes, will help Build attract those funds to investments in Atlantic Canada.
“This is how this business works,” said Barbara. “They may not invest initially, but as they get to know us . . . they are more likely to make investments in Atlantic Canada.”
Build Ventures has already invested in five Atlantic Canadian companies: Smart Skin Technologies, and Resson Aerospace, both of Fredericton; Introhive, of Fredericton and Washington, D.C.; Affinio of Halifax; and Celtx, of St. John’s.
Disclaimer: Build Ventures is a client of Entrevestor.
