Innovacorp, the Nova Scotia government’s early-stage venture capital agency, invested a total of $6.3 million in 17 companies in its 2019 fiscal year, marking a decline in investment totals from the previous year.
The agency each summer releases its annual Accountability Report with little fanfare, and the latest edition shows Innovacorp is continuing to make direct investments from its Nova Scotia First Fund while backing other investment groups. In the previous fiscal year, Innovacorp’s main fund invested $7.9 million in 16 companies.
“A robust start-up ecosystem is key to achieving a strong economic future for Nova Scotia and Atlantic Canada – and Innovacorp is helping build that ecosystem,” said the report.
Innovacorp in the last several years has made direct VC investments of about $5 million to $8 million annually in early-stage innovation companies. Meanwhile, there has been more investment from private funds, especially funds from outside the province, meaning Innovacorp is accounting for a smaller percentage of Nova Scotia’s VC investment than a decade ago.
Figures from the Canadian Venture Capital and Private Equity Association show that startups in Nova Scotia raised a total of $64 million to $77 million in total VC investment in each of the past three years. So Innovacorp now accounts for about one-tenth of the total VC investment in the province.
Innovacorp has contributed to the growing role of private investment funds. In the 12 months to March 31, 2019, it committed $15 million to the second fund of growth-stage investor Build Ventures and the same amount to the new early-stage fund Concrete Ventures.
The latest Accountability Report shows Innovacorp last year invested $2.9 million as follow-on funding in companies that were already in its portfolio: Spring Loaded Technology ($430,000); Ubique Networks ($2 million); and VineView ($500,000).
It invested $2.4 million in scaling companies that were new to the portfolio: BlueLight Analytics ($1 million); BoomersPlus ($350,000); Global Spatial Technology Solutions ($500,000); and Rimot ($500,000).
There were also 10 “emerging” companies that received investment of about $100,000 each in the last fiscal year: Axem Neurotechnology, Bereda Training, BioPolyNet, B-Line Analytics, Cribcut, Emagix, Graphite Innovation & Technologies, Nexus Robotics, Salient Energy and Trip Ninja.
The Accountability Report also shows the Nova Scotia First Fund received $2.3 million in “distributions” from exiting companies last year.
WoodsCamp Technologies, the Lunenburg, NS, company that helps woodlot owners manage their lands responsibly, was acquired by Washington, DC-based American Forest Foundation, and Marcato Digital Solutions, the Sydney company that provides administrative software for music festivals, was acquired by Pittsburgh-based Patron Technology. Neither WoodsCamp nor Marcato revealed how much they sold for.
“Overall, the value of the portfolio grew to $62.4 million, a net increase of $9.8 million (excluding the additional $6.3 million invested during the year), driven by distributions received and the net impact of unrealized valuation changes in portfolio investments,” said the report. It added that the fund still had $34.3 million left to invest as of March 31.
Innovacorp said the companies in its portfolio produced revenue of $35.5 million (slight decrease due to exits) and employed 688 people.
Disclosure: Innovacorp is a client of Entrevestor.