A Canadian venture development firm that specializes in helping large corporations fund and expand innovative tech startups has secured Royal Bank of Canada as the anchor investor of its $20-million fund.
Highline BETA has spent the past three and a half years creating and running accelerators for more than 10 corporations including RBC, Anheuser-Busch InBev and Aviva Canada. These accelerators foster startups that help the giants “ignite growth beyond their core business,” said Toronto-based founding partner and CEO Marcus Daniels.
The new fund, co-managed with partners Lauren Robinson and Ben Yoskovitz, will look to invest between $200,000 to $500,000 in early-stage companies looking to sell their offerings to large corporations. Highline BETA’s mission is to help startups get from the point when they are engaging potential corporate customers and entering pilot projects with them, all the way to signing contracts.
“Early-stage capital is often wasted with founders struggling to navigate complex corporate structures and ambiguous paths to decision makers within large organizations,” Ms. Robinson said.
Mr. Daniels added Highline is “looking at opportunities where we can create magic between a startup and a corporate partner. … We will sometimes play the role of marriage counsellor, other times we play the role of translator. Ultimately we’re trying to be an accelerator to make the win-win happen and them build companies alongside corporate partners... to transform industries.”
RBC’s chief strategy and corporate development officer Mike Dobbins said the bank’s investment in the fund “allows RBC to extend our commitment to the startup collaboration model championed by Highline BETA and provides a way for RBC to continue to support these newly created companies to create differentiated value for our clients.” The bank launched its RBC Reach corporate accelerator in partnership with Highline in mid-2018.
The Highline BETA fund was one of seven “alternative” venture capital firms selected by the federal government one year ago to receive a combined $50-million to back domestic technology startups. Another one of those recipients, Montreal consumer electronics technology startup factory TandemLaunch, said earlier this month it had closed its $30-million latest fund backed in part by the federal funding.
Highline BETA was inspired by an early-stage fund also named Highline launched earlier this decade by Mr. Daniels and Ms. Robinson that backed more than 60 companies, including a loyalty management program provider for millennials called Drop Technologies Inc., which RBC backed in a US$44-million venture financing announced in August. The pair, along with veteran investor and entrepreneur Mr. Yoskovitz, built Highline BETA to be a “venture studio” model that would work with corporations to identify opportunities where they could foster and fund innovations that would help them grow their businesses – not within the potentially stifling corporate environment, but outside in arm’s length accelerators.
Mr. Daniels said the Highline fund planned to invest in up to 30 companies.
He said Highline BETA had achieved the first close of its fund, raising almost half of the $20-million target.
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Sean Silcoff