After “intense” attempt to raise her own fund, Khera aims to back 25 to 30 deep tech startups with IRV.
After raising far less than it hoped for its first deep technology-focused venture capital (VC) fund and undergoing some leadership changes, Montréal-based Innovobot Resonance Ventures (IRV) is ready to invest again with a “refreshed vision” and veteran early-stage investor Neha Khera at the helm.
“We’re back, open for business, [and] ready to write cheques,” Khera told BetaKit in an exclusive interview. Khera, who has a 13-year track record in VC from her time with MaRS Investment Accelerator Fund, 500 Canada, and 2048 Ventures, joined IRV earlier this month as managing partner based in Toronto.
“The reason we had so many candidates was because there were so many people who were part of funds that had not been able to launch.”
Mario Venditti,
Innovobot
Innovobot, which oversees IRV and innovation hub Innovobot Labs, launched IRV back in 2018. But since IRV announced an initial close of $14 million CAD for Fund I in late 2022, IRV was ultimately only able to raise slightly more than that, falling well shy of its $40-million target amid tough VC fundraising market conditions. It restructured its management to suit a smaller fund.
Given this leadership turnover, the vast majority of Fund I has yet to be deployed.
IRV has made only two investments out of the fund to date, backing Montréal cleantech company CarbiCrete, which is working on decarbonized concrete, and Oneka Technologies, a Sherbrooke, Que.-based desalination startup.
Under Khera’s leadership, IRV plans to invest the remainder in another 25 to 30 deep tech startups over the next three years and go slightly earlier than initially planned. Deep tech typically refers to cutting-edge innovation that requires significant advancements in science or engineering to be realized.
IRV intends to focus on deep tech startups across Canada at the pre-seed stage, but is open to making seed investments and backing companies outside of Canada, cutting cheques of between $250,000 and $500,000 into businesses with strong intellectual property and technical moats in areas that align with Innovobot’s expertise, like artificial intelligence (AI), robotics, internet of things, and advanced materials that intersect with applications in industries like supply chain, healthcare, and energy.
Image courtesy Innovobot.
As traditional business-to-business software-as-a-service has gotten “really crowded,” Khera argued that innovation in that space has become “incrementalized.”
“When you think about the next big wave of where opportunity is going to come from, I’m a huge believer that it will be in this category that we call deep tech,” Khera said.
Adjusting to a smaller fund size
In an interview with BetaKit, Innovobot CEO and founding partner Mario Venditti said that IRV realized around late 2023 that raising a $40-million fund was no longer feasible and concluded that a smaller fund would require a shift in strategy. The VC firm informed its limited partners (LPs), which include undisclosed family offices and entrepreneurs like former Shopify CTO Jean-Michel Lemieux and Flinks co-founder and ex-CEO Yves-Gabriel Leboeuf.
Former IRV managing partner Zoya Shchupak left the fund in May 2024. “We came to the conclusion that Zoya was not going to be the one to lead the team,” Venditti said. He declined to say whose decision it was or elaborate further, aside from noting, “There was no clear path forward under a new strategy with the existing team.”
Around the same time, then-IRV general partner (GP) Sylvain Carle transitioned out of that role, but continues to remain involved as tech-for-good lead. When asked why Carle changed roles, Venditti said that given IRV’s ultimate fund size, the firm could not afford to have another partner. BetaKit has reached out to Shchupak and Carle for comment.
RELATED: Innovobot holds initial close of targeted $40-million fund to invest in “deep tech for good”
With Shchupak and Carle out, IRV took time to rebuild its strategy and largely refrained from deploying capital. According to Venditti, IRV’s existing LPs were supportive of the moves the firm made during this period, as none reduced their commitments or pulled out of the fund.
Venditti said that IRV conducted a broad search for a new managing partner with the help of a third-party firm, interviewing lots of candidates before landing on Khera, who is now leading the fund with Venditti and Innovobot CTO and founding partner Danny Grant supporting as GPs.
“Not only is [Khera] super smart, and not only is she super capable, but culturally, she fits what we’re trying to do here.”
Mario Venditti,
Innovobot
“Not only is she super smart, and not only is she super capable, but culturally, she fits what we’re trying to do here,” Venditti said. “She understands technology, having studied engineering and been in this space for a while.”
Khera co-founded and served as GP of 500 Canada. She made 16 investments during her time there, which she claims are up 20-fold on the books. These include ApplyBoard, BenchSci, FightCamp, and Mejuri. She also led 16 investments as a GP at 2048, backing Eli Health and Frate, among others.
She described herself as “a technologist through and through,” noting that the culture of Innovobot is very “technology first” and being able to “speak the same language” makes her a good fit to lead IRV.
Venditti said that Khera’s presence in Toronto was also a plus to the firm. “While that wasn’t critical, it was important to us to demonstrate that we did want to be pan-Canadian, not simply a local player,” he added.
Running into familiar challenges for Canadian VC
IRV’s fundraising struggles reflect the challenges Canada’s VC industry continues to face. As BetaKit has reported, Canadian LPs have become more cautious and selective since 2022 as macroeconomic conditions have deteriorated and exit markets have cooled. This LP pullback has led to smaller funds, longer fundraising timelines, shifts in investment strategy, and turnover across Canada’s VC industry.
Last October, Toronto’s Information Venture Partners pivoted to single-asset, special-purpose vehicle investing. Last month, Toronto and Montréal’s CMD Capital paused its operations indefinitely after failing to secure anchor institutional investors for its first fund. Investors BetaKit has spoken with expect to see more Canadian VC firms quietly follow suit.
As LPs have reduced VC allocations and concentrated dollars on established investors with a track record of returning cash, emerging managers (firms on their first, second, or third fund) have had a particularly tough time raising money.
RELATED: Performance anxiety and access to capital top of mind for Canadian VCs
“The reason we had so many candidates was because there were so many people who were part of funds that had not been able to launch,” Venditti said.
Khera was one of those people. She left 2048 Ventures as a GP in early 2024, and set out to launch a $20-million USD fund of her own. After “a very, very intense six months” fundraising, she decided to pull the plug on those plans.
“I realized that the product I was selling was not differentiated enough to get the traction I needed in a decent amount of time,” she said.
At the same time, Khera knew that there was still an unmet need for early-stage capital in Canada. She said she asked herself whether she cared more about chasing that opportunity or having her own fund, before deciding it was the latter. She met with IRV six weeks later.
Building a lasting deep tech platform
Today, Venditti said that IRV still has lots of capital left, dedicated LPs, and the right team in place to guide the fund through its next iteration. “While things didn’t go according to plan, we still built a fund in a time where many didn’t succeed,” he said.
According to Khera, IRV intends to build a portfolio consisting of a combination of more capital- and time-intensive deep tech startups and faster-growing software firms. To support its aggressive deployment plans, the firm is hiring for an associate based in Montréal.
IRV expects to source some deals from Innovobot Labs and lean on it for due diligence and post-investment support.
Image courtesy Innovobot.
IRV’s current focus is on investing the remainder of its first fund. Khera said the firm will begin thinking about a successor in a year or two. In the meantime, IRV hopes to bring in some new LPs and a bit more capital for its first fund ahead of a targeted final close in December 2025.
Venditti sees even more opportunity for IRV now given recent changes at BDC Capital’s Deep Tech Venture Fund. He wants Khera to help build IRV into a lasting franchise.
“Neha’s job is to turn IRV into a platform for early-stage investment in technology in Canada,” Venditti said. “This is slice one. We hope to have slice two and many more after that.”
Feature image courtesy Innovobot.
