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article imageLuge Capital launches $75 million venture capital fund

By Karen Graham     Jun 11, 2018 in Business
Montreal - Luge Capital, a new venture capital fund specifically focused on early-stage FinTech companies and artificial intelligence solutions applied to financial services, announced it has completed a $75 million round of financing to begin operations.
The Financial Post is reporting Luge Capital has received the backing of a number of large financial institutions including the Caisse de dépôt et placement du Québec (CDPQ) and Sun Life Financial.
In October 2017, $50 million of the raised capital was announced by CDPQ and Desjardins Group. And with additional support from other significant participants, like Fonds de Solidarité FTQ and La Capitale - Luge may expand the fund to $100 million in the coming months.
Luge Capital's mission
Montreal’s David Nault, a co-founder of Luge Capital said the name Luge was picked because "luge athletes face many of the same life-changing experiences and emotions as entrepreneurs. They live through lots of twists and turns, manage risk and are driven to win."
Specifically, Luge Capital will focus on early-stage fintech companies and artificial intelligence (AI) solutions applied to financial services. Over the coming years, these sectors are going to go through major transformations and the opportunities can be huge, according to Nault.
Luge Capital will support innovative solutions that enhance efficiency for financial institutions and implement data-driven methods and artificial intelligence for decision-making, concentrating on Seed and Series A financing. Initial investments will be between $250,000 and $2 million.
"We have partnered with world-renowned institutions that bring considerable industry knowledge and resources to enable us to help entrepreneurs build their businesses," said Nault, in Luge's Montreal office. "In addition, our AI and data-driven companies will have the opportunity to partner with our investors to access key insights in order to build best-of-breed solutions."
"We are looking for young mission-driven companies that challenge how the world interacts with financial services," said Karim Gillani, Co-Founder and General Partner in Luge's Toronto office. "We invest in bold teams that demonstrate passion, manage risk and optimize for performance."
Financial services companies interested in venture funds
This is not the first time traditional financial services companies have backed a venture fund dedicated to developing the financial technology-backed products and services that are upending the industry.
The Desmarais family behind Montreal-based Power Corp. launched Diagram last year with 50 individual “angel” investors to fund entrepreneur-driven fintech startups. The fund raised $25 million with a good part coming from the family’s investment vehicle Portag3, which has been instrumental in the funding of robo-advisor Wealthsimple since 2015.
Online lender Borrowell, and Koho, a mobile payments and banking startup were also recipients of the Desmarais family's investment vehicle. The increasing number of investments suggests the fintech poses less of a threat to traditional financial services companies profit margins than was originally thought.
Luge Capital has also partnered with iNovia Capital, with whom the firm will collaborate on co-investment opportunities and operations.
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