University of Toronto and McMaster, backed by Ontario, close $30M+ for life sciences seed fund to stem brain drain to Boston and Silicon Valley.
Ontario gets a new early-stage venture fund aimed at keeping university life sciences spinouts in the province. The Genesys University Seed Fund, backed by the University of Toronto, McMaster University, and the Ontario government, announced a first close of more than $30 million CAD. Limited partners include U of T, McMaster, Venture Ontario, the Temerty Group, and RBC. Genesys Capital, a local life sciences VC, will manage the fund. The target is $40 million total. It plans to invest up to $1 million each in 10 to 15 startups, with up to $5 million reserved for the highest-potential winners.
Ontario's life sciences cluster is one of the largest in North America, with nearly 76,000 workers across more than 2,000 firms. Yet the universities said scarce funding has forced promising innovators to move to Boston or Silicon Valley. U of T president Melanie Woodin put it directly: “Canada has no shortage of ideas or talent; what we lack is the capital to scale them.”
The fund will back startups developing medical devices and drugs targeting cancer, heart disease, and brain ailments, according to The Globe and Mail. It appears to be among Canada's largest university spinout funds. The University of British Columbia and InBC are currently raising a fund of the same size to support UBC-born companies. The University of Calgary's UCeed uses a venture philanthropy approach to the same problem.
For a researcher at U of T or McMaster with a promising discovery, the fund changes the early-stage calculus. Instead of spending months pitching U.S. venture firms that may demand relocation, a local fund tied to the university system can provide the first million dollars and follow-on capital. The fund is structured to attract additional private capital, meaning a successful first close could draw more LP interest.
The next marker is the final close at $40 million. If the first cohort of startups raises Series A rounds within 18 months, the fund's model will look replicable. U of T has said it hopes to create similar funds for other sectors.
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