Through VCCI, feds support the firm’s plans to launch new Montréal companies.
Montréal-based venture studio TandemLaunch has closed its fourth fund for early-stage deep technology startups at more than $37 million CAD.
The Government of Canada’s Venture Capital Catalyst Initiative (VCCI) committed $6.5 million to TandemLaunch through its inclusive growth stream as part of its final close, joining existing Fund IV limited partners (LPs) that include leads BDC Capital and Fonds de solidarité FTQ, as well as over 30 undisclosed family offices and angels from across Canada and abroad.
Founded in 2010, TandemLaunch builds and backs startups in artificial intelligence (AI), computer vision, internet of things, sustainability, and advanced sensors.
To date, TandemLaunch has invested in cleantech startup Agapyo and AI company Waveshaper via Fund IV.
Through its fourth fund, TandemLaunch aims to fuel the launch of 15 new Montréal tech companies. The company creation and venture capital (VC) firm has invested in two businesses to date via Fund IV: cleantech startup Agapyo, which is developing a compostable plastic replacement, and AI audio processing company Waveshaper.
TandemLaunch announced its first close of Fund IV in July 2024 at $27 million. At the time, founder, managing partner and CEO Helge Seetzen told BetaKit that TandemLaunch hoped to raise up to $40 million for Fund IV by September.
Like many other Canadian VC firms, TandemLaunch took longer than expected to close its fund, holding its final close in December. TandemLaunch associate Marko Gojgic told BetaKit over email that once the firm’s existing LPs heard about VCCI, they wanted to add more capital, which took some time. According to Gojgic, in addition to VCCI, some existing backers ultimately increased their position, and a few new, undisclosed smaller LPs joined Fund IV as part of its final close.
While TandemLaunch ultimately fell slightly short of $40 million, Gojgic claimed its goal was to raise between $30 million and $40 million for Fund IV. “We landed where we wanted,” he said.
Amid today’s challenging VC market, LPs have become more cautious and selective, which has led to smaller funds and longer fundraising timelines for the firms that invest directly in Canada’s tech startups. Just this week, fellow early-stage Canadian VC firm CMD Capital halted fundraising and paused its operations indefinitely, citing market conditions.
In a statement, Canada’s minister of small business Rechie Valdez cited TandemLaunch’s “proven track record of transforming breakthrough university technologies into high-potential startups” as one of the factors that drew the federal government to invest in the firm via VCCI, which is managed by BDC Capital.
To date, TandemLaunch claims it has created more than 30 successful ventures collectively valued at over $700 million and currently employing close to 700 tech workers in Québec. This is down from the over 800 TandemLaunch reported last year, a discrepancy Gojgic attributed to the prior number including core TandemLaunch employees, whereas its latest announcement accounts only for portfolio company staff.
RELATED: TandemLaunch secures $27-million first close of Fund IV to build more Montréal deep-tech startups
TandemLaunch’s portfolio includes Sportlogiq, Wrnch, Soundskrit, Mirametrix, and HaiLa Technologies, among others.
TandemLaunch specializes in university tech transfers, scouting for interesting intellectual property (IP) at universities, acquiring that IP, building a team, and then creating and incubating a startup to commercialize it, taking an equity stake in the company.
Seetzen currently leads the firm alongside longtime managing partner Émilie Boutros.
As the venture studio model—where organizations create, build, and provide early capital to startups in-house—has become more common in recent years, Seetzen has argued TandemLaunch’s real differentiator has become its international approach to intake and talent.
Speaking to TandemLaunch’s revised 15-startup target for Fund IV—a slight increase from the more than a dozen that the firm said it planned to launch last summer—Gojgic said, “We think we can be more ambitious … we have a lot of great opportunities in the pipeline.”
UPDATE (02/28/25): This story has been updated to include additional information and commentary from TandemLaunch.
Feature image courtesy TandemLaunch.
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