Whitehorse Daily Star

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Pictured above: Ben Asquith and Patrick Lor

‘Major boost’ for tech start-ups unveiled

The territorial government and the newly established Yukon First Nation Investment Corp. will invest a total of $5 million into Panache Ventures to support technology sector start-ups in the territory.

By Gabrielle Plonka on September 23, 2019

The territorial government and the newly established Yukon First Nation Investment Corp. will invest a total of $5 million into Panache Ventures to support technology sector start-ups in the territory.

“Our local technology and innovation industry has expressed frustration about the funding gap and lack of access to local equity,”

Economic Development Minister Ranj Pillai told a news conference this morning in Whitehorse.

“Supporting this investment will help address those frustrations, enable future investment infrastructure, promote home-grown investment and advance Yukon’s technology and innovation ecosystem.”

The investment of $5 million contributed to Panache Venture’s $58-million inaugural fund.

Launched in 2018, Panache is a seed stage venture capital fund with offices in Montreal, Toronto, Calgary and Vancouver.

Panache’s mission is to provide investment as well as coaching, training and networking to Canadian technology start-ups at the beginning stages of operation.

Panache is backed by several institutional investors including the National Bank of Canada, TELUS Ventures, BMO Bank of M

Montreal and BC Tech Fund. The Yukon First Nation Investment Corp. is the most recent body to join Panache as a major investor.

Since launching, Panache has invested in 52 technology startups in Canada and the U.S. with approximately 60 per cent of those businesses local to Quebec and Ontario.

The Yukon’s investment aims to bring Panache executives to the territory and focus funding on local technology entrepreneurs.

The territorial government provided $2 million to the Yukon First Nation Investment Corp. to support their investment in Panache. The remaining $3 million was provided by the corporation, with backing from five First Nation development corporations.

Patrick Lor, Panache Ventures Managing Partner, said approximately three per cent of Panache’s total capital fund is expected to benefit Yukon businesses.

So far, Panache has invested in one Yukon technology start-up, a digital document tracking service called Proof.

Lor said an application process is available to Yukon businesses wishing to apply for funding. However, the Panache team prefers personal connection when considering investment.

Lor encouraged local entrepreneurs to reach out to the capital fund management team through email, text or the social media platform LinkedIn.

“We want to talk to companies rather than have them apply,” he said. His team is looking for companies in the early stages of growth with strong conviction and entrepreneurial spirit, he added.

Lor said his team members plan to visit the Yukon regularly and hope to spend time speaking face-to-face with local entrepreneurs.

He will spend most of this week in Whitehorse with partner Nicolas Jacques-Bouchard.

The firm’s focus is on companies innovating in artificial intelligence, financial technologies, health care, property technology and business-to-business software.

Ben Asquith, the president of the Yukon First Nation Investment Corp., said he believes investment in Panache Ventures will have a big impact on the territory’s technology sector.

“Panache is an amazing group of experiences managers who have invested their own money and shown amazing returns,” Asquith said.

“We want to see our investment efforts expand, and we know technology and innovation is key to expanding Yukon’s modern economy.”

Asquith added he believes the investment to be in compliance with the 1990 Council of Yukon First Nations Umbrella Final Agreement. That document outlines a framework for co-operation between First Nations and the Yukon government.

“This investment is not just for First Nations,” Asquith said.

“This investment has the potential to provide access to equity to all Yukon entrepreneurs, and shows how final agreements can benefit all Yukoners.”

Pillai said he is proud to see Umbrella commitments honoured. He believes the investment will provide positive opportunity for First Nations to enter the knowledge sector.

He added the investment will help the Yukon’s entrepreneurial ecosystem flourish.

“Simply, we’re seeing brilliant entrepreneurs that are growing their companies, and what they need is capital,” he said.

Pillai said he believes the investment will inspire entrepreneurs to stay in the Yukon rather than travel to Canada’s major centres to grow their businesses.

“Today’s announcement is a major boost for Yukon’s start-ups,” he said.

Comments (10)

Up 2 Down 3

Simon on Sep 28, 2019 at 9:04 am

@Johnson - Sounds like you're secretly envious of other peoples' success. Why can't you just be happy for them and what they've achieved?

Up 8 Down 5

@Simon on Sep 27, 2019 at 2:47 pm

Ben and his Liberal ilk are all from Ontario and spend their time there. They are only in the Yukon when it's time to refresh their coffers with our money. They are simply Yukoners in convenience. I would doubt they have even switched over to a Yukon drivers licence.

Up 3 Down 7

Simon on Sep 27, 2019 at 1:44 pm

@Johnson - Proof is not a Toronto company. They started in the Yukon and are still here today. One of its co-founders, Ben Sanders even ran for the Yukon Liberal nomination back in 2014 http://www.yukontimes.com/interview-over-a-cup-of-coffee-with-ben-sanders.

I don't know what the future holds for Ben and his team, but they absolutely began their journey here in Whitehorse. Their first customers were Government of Yukon and they still do a lot of work for them today.

Up 22 Down 6

Johnson on Sep 25, 2019 at 11:38 am

More government money for Proof, a company from Toronto, posing as part time Yukoners to access the government trough and led by a former Liberal party candidate... Colour me surprised!

Up 10 Down 1

Jackson on Sep 24, 2019 at 9:04 am

@melba I think how much of the fund invested into Yukon businesses is only part of the equation. What is Panache's track record? What type of financial return on investment might the fund management target annually that would be a direct benefit to the FN investors? Funds also typically partner on deals to diversify risk. So that 3% of the fund could be leveraged with other investment capital and could yield many times that amount invested in Yukon startups. But that, no doubt, depends largely on the quality of the investable opportunities coming out of Yukon.

Up 9 Down 7

Ex Investment Banker on Sep 24, 2019 at 8:56 am

This is an unusual means to achieving greater VC funding for Yukon tech.
Naturally, $5 million could not support the establishment or ongoing operation of a separate VC fund for the North - but there are certainly less expensive methods to screen, fund and scale promising start-ups. Especially if Panache charges its LPs a 2 & 20 fee structure.

Furthermore, with only $2 million to deploy into the Yukon, they would likely only select one additional portfolio company.
My suspicion would be that Panache approached these Yukon Institutions for capital which they could specifically ear-mark for Proof's subsequent fundraising rounds at higher valuations.

This could be justified on the basis that if Proof can navigate a successful exit, their success story could attract more entrepreneurial talent and capital to the north, in addition to helping those existing investors of Proof, which there may be in the Territory.
Secondarily, if the company scales and remains partially in the Yukon (unlikely), there would be more technology jobs.
Regardless of whether the capital reaches new firms or only goes to Proof, it is a a bold move that could post some good returns!

Up 24 Down 6

Jason on Sep 23, 2019 at 7:12 pm

@Melba, I agree.
First off, Mr. Asquith is bringing this deal forward, big red flag right there. He's not there to create Yukon jobs, rather, only to generate a profit for his dev corp. He somehow convinced (suckered) YG into putting in 40% of the equity stake for this investment - well done I guess? YG, you may think this is worth the $2M in terms of scoring political points with the dev corps, but just wait until the next time Mr. Asquith doesn't get his way ... The bus runneth over they say.

Second of all, where's this $2M in taxpayer funds coming from Mr. Pillai? Is it through a program which has policy and/or regs? Do any of the rest of Yukoners have access to this fund or just FN?

I guess I'll add as well that we effectively already have this ecosystem for local entrepreneurs in the form of cospace and yukonstruct. A service which is open to all Yukoners. Maybe it would have been wise to put more money into that? Call me crazy I guess.
Anyways, do let me know where I sign up to have the YG put in 40% equity into an investment that is not even really local. Mr. Asquith said it in his quote already "they've shown great returns" .... on their investments based in Ontario and Quebec.

Cool project though.

Up 23 Down 2

Thomas Brewer on Sep 23, 2019 at 5:30 pm

@melba, you took the words right off my keyboard.

Why not take the $5m and invest the whole thing locally vs to an organisation that sends 60% of their funding to Ont and Que??
I want names of the bureaucrats that came up with this decision.

Up 21 Down 1

dick tracy on Sep 23, 2019 at 4:58 pm

So these financial hotdogs have invested their own money and made amazing returns eh? On a fund that has only been around for less than a year? Hardly a track record. VC firms don’t normally invest their own money, but other
people’s money, then take a commission on the money invested, not the returns. The take is usually about 3%, whether the investments do well or not. So that’s a 60K cost every year on Yukon taxpayer’s $2M « investment » in this. And do we get a share in the profits if these Yukon start-ups do well, or do we just assume the high risks without the returns?

Or is the return the « sage » advice given by these by these youngsters? Or maybe just a shell game to funnel taxpayer money into the hands of a few pet businesses?
Here’s a bit of a reality check: hbr.org/2013/05/six-myths-about-venture-capitalists

Up 53 Down 7

melba on Sep 23, 2019 at 4:21 pm

Yukon governments, FN and YG, provide $5 million of 58 million of total equity in Panache, (8.6%), and in return the director of Panache says that 3% is expected to flow to Yukon businesses. ($2 million) This already stinks. I am not a 'tech start up' professional, but after reading this article I am left wondering why the Yukon sent this firm 5 million bucks. I hope it works out, but after decades of watching this sort of thing in the Yukon, I am worried that this is another debacle / boon doggle, and I wonder who the person is that talked these governments into coughing up all that money.

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