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Janet Bannister, managing partner at Real Ventures, in the MaRS building in Toronto on Jan. 25.Christopher Katsarov/The Globe and Mail

Janet Bannister, one of the few women to lead a major Canadian venture capital fund, is departing Real Ventures after the firm struggled to raise a new fund.

Ms. Bannister joined Real in 2014 after overseeing the development and launch of eBay Inc.’s EBAY-Q classified service Kijiji when she was an executive with the pioneering e-commerce giant. She became managing partner at Montreal-based Real in early 2020 amid a period of internal tumult that saw two of its three founding partners, JS Cournoyer and Alan MacIntosh, step back to part-time roles.

“It has been a pleasure to lead the Real Ventures team for the past couple of years,” Ms. Bannister said in a statement. “I look forward to continuing to work with the team, my portfolio companies, our investors, and the tech community” as she transitions to a part-time role before leaving the company.

She will be replaced by Real’s last remaining founding partner, John Stokes, who said in an interview he was “disappointed and sad” she was leaving.

Ms. Bannister, a two-time winner of the Canadian national triathlon championship, has been one of the highest-profile names in the Canadian early-stage tech sector and a mentor to startups, including many run by female entrepreneurs. Her departure leaves questions about Real’s future, as, without a new fund, it lacks fresh capital to invest in startups.

Mr. Stokes said Real’s focus now is to manage its 60 investments and continue the firm’s community-building efforts. He said Real’s plan to try to raise another fund depends on various factors, including “ensuring we have sufficient momentum,” adding it could take months or quarters. “The message is definitely that Real Ventures is not winding down.”

Real emerged as an early force in Canada’s tech renaissance following the 2008-09 credit crisis, after having set up shop in Montreal in 2007 when Canada’s venture capital and startup scenes were moribund. Real played a key role in reviving the sector, not just as a financier but also by creating accelerator and support programs in Montreal and Toronto.

The firm raised $5-million and $50-million for its first two funds in 2007 and 2010, respectively, backing several successful startups including PasswordBox, which sold in 2014 to Intel, and online merchants Frank & Oak and Beyond the Rack.

The firm raised a $89-million third fund in 2015 and a total of $180-million for two funds in 2017, drawing backing from global investors Tencent Holdings Ltd. and Singapore sovereign wealth fund Temasek Holdings Private Ltd.

Along the way Real has backed some of Canada’s most valuable tech startups, including Paper, Blockstream, Xanadu Quantum Technologies, Tenstorrent and League. It has $800-million worth of assets under administration.

But Real also had a setback when artificial-intelligence startup Element AI Inc., co-founded by Mr. Cournoyer, failed to live up to its early hype. It was sold in early 2021 to ServiceNow Inc. after running out of money.

Behind the scenes some Real backers grew frustrated, said one source familiar with the situation. The source said its limited partners felt Real spread itself too thin by investing in too many companies and not reserving enough capital to invest in follow-on financings. While Real’s on-paper returns were strong, some felt the firm also didn’t prune its positions as much as it should have which would have enabled it to lock in gains and return cash to backers.

Mr. Stokes said “we have confidence that over time the concerns which our limited partners have had around turning our high-performing funds into cash” will be assuaged.

The turnover at the top also miffed some Quebec investors, according to another source, as the two Montreal-based founding partners and a third Montreal-based partner who later left were replaced by a Toronto-based partner they didn’t know, tech executive Hamzah Nassif. While Ms. Bannister was well-regarded by investors and lauded for improving Real’s internal management, the leadership shift from Montreal to Toronto did not play well with at least one of its backers, the Quebec government’s Investissement Quebec agency.

The Globe and Mail is not identifying either source as they are not authorized to address the matter publicly.

Ms. Bannister took much of the summer off to ponder her future after more than a year of fundraising efforts fell short. In a brief interview, she said “I am 100-per-cent committed to the Canadian tech ecosystem and I am going to stay involved” and work with founders.” I’m very passionate about these things, they bring great joy and satisfaction to me, but I want to find a different way to do that.”

Asked if she plans to launch a new venture capital firm, Ms. Bannister said only: “As soon as I have something to share I will let you know.”

Canadian startup news website BetaKit first reported Wednesday about Ms. Bannister’s role change.

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