– By Neil Parmar
Since its launch in 2012, the JOLT Fund has invested in 23 companies that have attracted a total of $10.5 million in angel, venture capital (VC) and government funding.
Entrepreneurs looking for funding may benefit from a closer look at how JOLT’s ventures have fared, financially, and who is behind the growing flow of funds.*
Nearly half of the 17 JOLT graduates attracted outside funding and secured an average of $1.1 million in seed capital per company. Angel investors provided the greatest source of funding with a number of notable investments worth highlighting:
Turnstyle Solutions provides customer analytics and location-based marketing solutions for brick-and-mortar retail stores.
PUSH, an app-enabled fitness device, successfully crowdfunded more than $133,000—and easily beat its $80,000 target. This success in the market helped PUSH complete a funding round led by a local angel with participation from the Youth Investment Accelerator Fund.
Nudge Rewards helps organizations engage individuals in community volunteerism. Last year, completed a $1 million funding round from the Youth Investment Accelerator Fund, RBC Generator Fund and a pool of investors from the Waterloo-based Golden Triangle Angel Network.
Taplytics, a cloud-based mobile development and optimization platform that also graduated from the Y Combinator accelerator earlier this year.
Beyond angels, key investors in JOLT accelerator grads include the Youth Investment Accelerator Fund, which in addition to supporting PUSH and Nudge Rewards, led Singspiel’s seed round this fall, as well as the Canada Media Fund, which supported Venngage and Stylekick —a recent recipient that also secured angel investment earlier this year.
“The additional capital is critical as it allows our founders to continue to build upon the positive momentum they’ve created so far,” says Kerri Golden, JOLT Fund’s General Partner. “It also provides the companies with both the confidence and gas in the tank to add talent to their teams and sign on more partners and customers.”
But how do the fundraising results from graduates of JOLT, which specializes in ideas that leverage technology, compare with the overall information and communications technology (ICT) seed-funding landscape in Canada? It’s difficult to measure the full scope of seed investing in the country, as the number of deals and details about them are often unreported publicly. Yet certain trends have emerged that may provide some context:
– The number of VC-backed ICT seed stage deals in Canada has dropped from its high of 32 deals in 2011, when the average investment was $860,000 per deal, to 19 deals in 2013, when the average fell to $750,000 per deal, according to data from Thomson Reuters.** And, so far this year, there have been only two seed stage deals.
– Meanwhile, 47 ICT companies in Canada raised an average of $771,000 in seed investments from angels last year, and funding from this group of investors continues to grow, according to the 2013 Report on Angel Investing Activity in Canada from the National Angel Capital Organization.***
So what’s behind the dramatic drop in VC-backed seed deals and an uptick in activity from angels? According to Thomson Reuters’ data, there were significantly fewer VC-led seed rounds in recent months, in part, because seed stage investing has largely become the realm of angel investors. Despite these changes in the market, JOLT companies have stacked up well against their peers in the ICT sector.
“It’s been a solid couple of years since we established JOLT,” says Sue McGill, the executive director of JOLT. “Investment levels per company continue to rise, coupled with a steady increase in the number of graduates attracting follow-on financing,” adds McGill. “Looking ahead as market conditions continue to change and challenge our founders to raise their game, I’m extremely excited and optimistic about our portfolio’s future growth.”
23: Companies accepted into JOLT program.
17: Graduates of the accelerator program, 11 active, 5 inactive and 1 acquired.
6: Active companies in current cohort.
$10.5M: Total funding raised, including JOLT Fund investment.
The JOLT Fund:
$910,000: Amount invested by the JOLT Fund in companies.
$40,000: Average amount JOLT Fund invested per company.
10.5X: JOLT Fund investors have seen their capital leveraged by the additional $9.6 million that the companies have raised on top of the $910,000 invested by JOLT Fund.
*Data is based on quarterly reports provided to JOLT Fund by its portfolio companies.
**Canada’s Venture Capital Market Report Q4 2014: http://www.cvca.ca/files/News/CVCA_VC_Data_Q2_2014.pdf
***2013 Report on Angel Investing Activity in Canada: http://nacocanada.com/wp-content/uploads/2014/05/2013_Report-on-Angel-Investing_Report_Web.pdf