White Star Capital has closed its fourth flagship fund, raising US$250 million to invest in scaling companies across North America and Europe. The fund, opened in 2024, closed about US$100 million below its target, as higher interest rates and strong public markets weighed on venture capital fundraising.

The fund will focus primarily on Series A and B investments, the same strategy White Star has pursued since launching in New York, Montreal and London in 2014.

The latest fund is smaller than its predecessor, which closed at US$360 million in 2021. White Star co-founder Jean-Francois Marcoux said that’s in part because the firm has split its strategy across multiple investment vehicles. Historically, White Star made occasional seed investments through its main fund. Last year, however, it launched a dedicated US$50-million North American seed fund to back early-stage companies. The firm has also raised roughly US$50 million for special-purpose vehicles for one-off investments. 

Still, Marcoux said fundraising has been difficult in recent years, particularly compared to the last time White Star raised at the height of the pandemic-era investment boom. “It’s been a slower fundraising environment and more challenging across the industry,” he said, adding that higher interest rates and strong public-market returns had dampened enthusiasm among family offices and wealthy individuals to invest in venture capital funds. 

The firm, which now has eight offices worldwide, relied heavily on returning investors for the new fund, Marcoux said. It had particularly strong support from investors in Quebec, where Marcoux is based, including pension fund subsidiary Fonds de solidarité FTQ, Investissement Québec, Desjardins and Teralys Capital. New and existing European investors also participated. 

The firm plans to invest in 15 to 20 companies through the latest fund, typically writing initial cheques of between US$5 million and US$15 million, said Marcoux. About half the capital is reserved for follow-on investments, he said, which means White Star could ultimately invest as much as US$25 million to US$30 million in a single company. It’s already made eight investments, including in Montreal-based Tetrix, New York-based startups Sequen, OatFi and Trayd, and Paris-based Veesion and AMI Labs. 

The close comes as venture capital firms continue to contend with a slow market for exits and lacklustre returns. Marcoux said, however, that White Star’s Canadian and U.S. exits have been relatively strong, which has helped drive interest in its North American investment business. In Canada in particular, the firm has backed 20 companies across its portfolios, he said, six of which—or 30 per cent—have been acquired for more than $100 million, including Carbon6, Dialogue Health Technologies and Mnubo. 

That performance has persuaded White Star to increase its Canadian asset mix from about 20 per cent of its overall portfolio to 25 per cent to 30 per cent, said Marcoux. 

Marcoux said White Star’s next priority will be expanding its institutional investor base in the U.S. The firm has historically raised capital from investors in Canada, Europe and Asia and has not yet broken into the fiercely competitive U.S. market. That could change with the next fund, he said, as White Star looks to capitalize on growing international interest in investing in Canadian companies.