Tech execs raise $15 million for new homegrown startups

The Simple Ventures founding team and portfolio chief executives. From left to right, Harvest CEO Matt Himel, Zero Collective CEO Ashley Boyce, Simple Ventures CEO and co-founder Rachel Zimmer, Alma Care CEO Melissa Gallagher and Simple Ventures co-founder and chair Mike Katchen. (Credit: Simple Ventures)

A cohort of technology executives and business leaders have raised $15 million for Simple Ventures Inc., a venture studio that aims to create 25 high-growth Canadian-founded-and-headquartered companies by 2030.

The money will help Simple Ventures, founded in 2024, build 10 companies, three of which have already been launched. The studio said it will create at least three Canadian companies per year and it is currently building two businesses that are in stealth mode. It plans to finalize funding by year-end to reach a total fund size of up to $20 million.

TD Innovation Partners, a unit of Toronto-Dominion Bank, Sun Life Financial Inc. and Sobeys Inc., participated in the funding round, as did the venture studio’s founders and investors such as Wealthsimple Inc. founder and chief executive Mike Katchen, Shopify Inc. president Harley Finkelstein and Knix Wear Inc. founder and chief executive Joanna Griffiths.

“We are coming together to issue a call to action, to bring Canadian talent home,” Rachel Zimmer, co-founder and chief executive of Simple Ventures, said. “To retain great Canadian talent, we need to have great Canadian opportunities.”

Zimmer, who most recently led startup studio Entrepreneur First, and Katchen launched the venture studio last year after having many conversations on the future of the Canadian economy.

“We were deeply concerned. We have systemic problems,” she said, pointing to Canada’s dwindling numbers of entrepreneurs and the U.S. poaching its entrepreneurial talent. “Simple Ventures is our small way of contributing to solve this problem instead of just talking about it.”

Despite Canada’s population boom, the country has 100,000 fewer entrepreneurs than it did 20 years ago, according to a 2023 study by the Business Development Bank of Canada and the University of Montreal.

Simple Ventures said it differentiates itself from traditional venture capital firms by identifying business concepts that have succeeded abroad and seeding them in Canada.

“We identify new ideas and validate them,” Zimmer said. “We do a minimum viable product and test potential customers, then invest and build the company.”

It also recruits and appoints CEOs to helm the new companies and pairs businesses with successful Canadian founders who can offer advice.

For example, Alma Care Retreat Inc., a postpartum care platform launched by the studio, was inspired by care centres found in Korea, China and parts of Europe. “We look around the world… and bring the best innovation to Canada, so Canadians don’t miss out,” she said.

Zimmer said the studio’s focus on networks and capital will help it get ahead.

“Historically, that’s been hard to do in Canada. These two key ingredients (will) give companies the best chance of success,” she said. “Many founders in our network have returned to Canada, taking what they’ve learned abroad and bringing it home.”

Zimmer pointed to Harvest AI Inc., one of the studio’s companies that has created an artificial intelligence tool to help small businesses collect overdue payments, which is being guided by Kirk Simpson, the founder and former chief executive of Wave Financial Inc. H&R Block, Inc. bought the company in 2019 for $537 million.

“This is … Canadians helping Canadians,” she said. And we have the very best in the market to do so.”

Canadian tech leaders in recent months have grown more vocal about encouraging entrepreneurs and founders to remain in Canada amid the trade war launched by United States President Donald Trump and mounting frustrations over this country’s innovation and productivity crisis.

Aidan Gomez, the founder and chief executive of artificial intelligence startup Cohere Inc., urged Canadian founders to keep their businesses in Canada and reject the temptation of U.S. capital.

“Don’t do it. You’re here to build a Canadian company. We need this. We need to take an active nationalistic stance to build for Canada,” he said at a Toronto Tech Week event in June, adding that Cohere rejected a nine-digit takeover offer from a major U.S. company.

Earlier this year, a group of Canadian tech founders and business leaders launched Build Canada, a platform to publish policy recommendations from the country’s tech community.

Zimmer shared a similar sentiment, adding that it is now a “crucial time to … put fire in the Canadian engine.” She said part of the problem lies in focusing on only Canada’s negatives.

“We have a lot of advantages to building here,” she said. “In Toronto specifically, we’ve got access to most multinationals within a 60-minute radius and have one of the best talent hubs in the world.”

Simple Ventures is one of several recently launched venture funds focused on building Canadian companies. Toronto-headquartered venture studio Axl opened its doors in June, announcing its mission to build 50 AI companies in Canada over the next five years.

“The opportunities to swing big with the right support (are here),” Zimmer said. “Top talent should feel and see that there’s a massive opportunity here.”

• Email: ylau@postmedia.com