The Montreal Venture Studio specializes in technology transfer to universities.
Montreal-based venture studio TandemLaunch has secured C$27 million in the initial closing of its fourth fund to create and support additional early-stage deep tech startups.
Limited partners (LPs) in TandemLaunch’s Fund IV, led by BDC Capital and Fonds de solidarité FTQ, include more than 30 family offices and angels from Canada and abroad. The company formation and venture capital (VC) firm aims to secure up to $40 million for Fund IV by September, with plans to help launch more than a dozen Montreal startups.
“We’re kind of like a reverse brain drain. We bring in talent. [IP] I’m going to Montreal and storing it here.”
TandemLaunch specializes in technology transfer to universities, building and supporting companies in the areas of artificial intelligence, computer vision, the Internet of Things, and advanced sensors for sustainability. In an interview with BetaKit, Helge Seetzen, managing partner and CEO of TandemLaunch, said that spinning out companies from universities is “very difficult.”
“There’s a lot of great researchers out there doing a lot of really smart research, but they don’t have the infrastructure or the support,” he added. “They have great technology, but they have really weak ways of getting it out of universities, and that’s why this disconnect exists.”
“Basically to take advantage of arbitrage opportunities and find great intellectual property,” Seetzen said of why he founded TandemLaunch in 2010. [IP] We find underutilized technology and find ways to bring it into the commercial world.”
Led by Seetzen and longtime managing partner Emily Boutros, TandemLaunch and its team of about 60 people identify interesting IP at universities, acquire the IP, assemble a team, then found and incubate the startups and invest equity in them to commercialize. This founding process typically costs $1 million per company, according to Seetzen, and TandemLaunch has the capacity to invest up to $4 million per company through its fourth fund.
To date, TandemLaunch claims to have launched over 30 successful ventures with a combined value of over $700 million, employing a total of over 800 technologists in Quebec, and amassing a portfolio that includes Sportlogiq, Wrnch, Soundskrit, Mirametrix and HaiLa Technologies.
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TandemLaunch focused solely on company creation with its first $10 million fund and second $15 million fund, launching about a dozen companies each.
“That’s pretty much everything we’ve done,” Seetzen said. Fund III and now Fund IV have made TandemLaunch the “pinnacle of a more traditional VC firm” with a larger reserve for follow-on investments. Other than that, Fund IV is “a carbon copy of Fund III in almost every way,” Seetzen said.
Initially, TandemLaunch’s approach required some explaining, says Seetzen: “When I started this business, the venture studio part, the venture builder part, was brand new,” he says, “and I spent years trying to explain to people that this was possible, that this was doable.”
As the venture studio model has become more common in recent years, Seetzen argued that TandemLaunch’s real differentiator is its international approach to recruiting and talent. He said TandemLaunch has technology acquisition agreements with nearly 100 universities and hires top talent from around the world.
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“A lot of Canadian incubators develop talent and technology at one university and then they send it off to San Francisco in a blink of an eye,” Seetzen says. “We’re kind of like a reverse brain drain. We’re taking talent and technology and sending it to San Francisco.” [IP] I’m going to Montreal and storing it here.”
TandemLaunch began fundraising for Fund IV in January amid a tough venture capital environment. The first close took place two weeks ago, buoyed by strong support from existing LPs. Seetzen said the proceeds from TandemLaunch’s early portfolio worked in its favor this time around.
Seetzen has been through several market cycles — launching his first startup just after the dot-com bubble burst and founding Tandem Launch after the 2008 financial crisis — and that’s influencing his approach to building and raising funds for companies during the current downturn.
“I’ve been through good times and bad in venture capital, and the short answer is if you build a good company, you’ll be fine,” Seetzen said. “I’ve seen this many times. It’s the hype that gets hammered.”
Feature image courtesy of TandemLaunch.
