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Investissement Quebec, which contributed $55-million of Vention’s latest financing round, has invested $800-million in venture capital over the past decade.Christinne Muschi/The Canadian Press
The Quebec government’s investment arm has made its largest venture capital bet to date, leading a $150-million financing by Montreal industrial automation vendor Vention Inc.
Investissement Québec contributed $55-million of the financing, announced Tuesday, which was also backed by new investors Desjardins Capital and Nvidia Corp.’s NVentures unit, plus existing backer Fidelity Investments. Nvidia has also funded Canadian artificial-intelligence startups Cohere Inc. and Waabi Innovation Inc. and collaborates with Vention on motion-control technology.
IQ has invested $800-million in venture capital over the past decade, backing some of Quebec’s most prominent tech companies including Lightspeed Commerce Inc., Coveo Solutions Inc. and AlayaCare Inc.
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Vention has “the right team with the right product at the right time,” said Jean-Simon Cayer, a venture capital investment director with IQ. “Big shifts are happening with western reindustrialization and labour shortages. All that leads to more automation. It’s complex and costly but with Vention, the complexity is greatly reduced, and the company has one of the best teams we’ve ever seen.”
The round includes about US$20-million in debt. While many large tech financings in recent years have included secondary deals – with investors buying out other shareholders – all funds in this deal went to Vention.
The 10-year-old company, led by former McKinsey consultant Etienne Lacroix, is a unique, vertically integrated combination of parts supplier, hardware designer, e-commerce firm and provider of 3-D computer-aided design software to the factory automation market.
Its customers are engineers at more than 4,000 factories in 30 countries owned by companies such as Toyota, General Electric, Tesla, Siemens and Airbus. They create, design and order custom equipment on Vention’s online platform to use in their production lines, including robot workstations, test benches and assembly lines, plus software to operate and analyze the machines. Vention supplies its own metal building parts plus items from third parties including robotics giants Fanuc and Universal Robots. Vention has a library of thousands of ready-made designs, some of which have been contributed by its customers. Flat-packed orders arrive within days with assembly instructions.
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Vention has tripled in size since it last raised money in 2022 – a US$95-million deal led by Georgian Partners – and recently surpassed $100-million in annualized revenues. It raised the money at the same price as its last round – US$231.03 a share for a new class of preferred stock – according to a filing with Industry Canada. Valuations across the tech sector have fallen since late 2021 after hitting bubble levels, with notable exceptions in artificial intelligence and quantum computing.
Privately held Vention is now valued at more than US$1.2-billion. Other investors include U.S. funds Bain Capital Ventures and Bold Ventures, plus U.S.-Canadian fund White Star Capital.
Mr. Lacroix said that since the last financing, Vention has “significantly improved its path to profitability,” although it is still losing money as it is investing heavily in research and development. It will use some of the proceeds to keep doing so, spending in such areas as design, programming, simulation and artificial intelligence to power autonomous factory robots. Vention also plans to build out its capacity to sell to large companies, and to expand in Europe, where it derives 20 per cent of its sales.
He added he felt it was important for Vention to raise most of its capital in this round primarily from Canadian sources, which accounted for more than 75 per cent of the funding. “We’ve always raised on both sides of the border, but we wanted to make sure Vention stays Canadian forever,” he said.
