A group of high-profile Canadian entrepreneurs has joined forces to build a new cohort of startups, with an approach to incubating businesses that is the first of its kind in Canada.

Simple Ventures was co-founded by Wealthsimple CEO Michael Katchen and Rachel Zimmer, a former partner at startup accelerator Entrepreneur First who is leading the firm as CEO. It is backed by a conglomerate of more than 30 investors, including Shopify president Harley Finkelstein, Knix founder and president Joanna Griffiths and Ada CEO Mike Murchison. 

Simple Ventures styles itself as a venture studio rather than a traditional venture capital firm. It will identify business ideas that have been successful in other countries but haven’t yet caught on in Canada. It will then put its money to work building those businesses from scratch and recruiting CEOs to lead the new companies. 

Like the companies Simple is looking to start, the venture studio model itself draws inspiration from the U.S. and Europe, where it’s sometimes used as an alternative to a typical startup accelerator. 

Katchen, who serves as chair of Simple Ventures, said the team was compelled to start the venture studio after years of giving talks on how Canada needs to be more innovative. “Rather than sitting on another 20 panels … what can we actually do about this problem?” he said. “We thought, ‘Let’s go start some Canadian companies and let’s help some entrepreneurs get their start.’” 

In his own experience founding Wealthsimple, Katchen said, critics told him Canada was too small for the business to take off. Fintechs from around the world had written off the Canadian market because of its size and because of the challenges posed by the country’s strict regulations on financial service companies, he said. Rather than being discouraged, Katchen saw an opportunity to fill a void. 

Simple Ventures is similarly looking to build companies that will fill gaps in the market. The idea is that if a business worked in other countries, it can—with some tailoring—work in Canada, too. 

Simple works with a group of roughly 12 to 15 former founders to help develop business concepts and bring them to life. As the businesses take shape, Simple will tap into the knowledge and skills of its high-profile investors according to their expertise.

The group has also raised money from corporate investors, including Sobeys and Halo Health founders. Along with capital, those investors offer portfolio firms access to customers and distribution channels, said Zimmer.

Zimmer and Katchen declined to disclose how much money they’ve raised and how much total capital they’re targeting for the fund. They would not say how they intend to divide ownership of their portfolio companies between Simple’s investors and the CEOs it hires, but Zimmer said they’ve structured terms to be “life-changing” for everyone involved, “with a very high probability of success.” 

The venture studio plans to build 10 companies from its first fund. So far, it has incubated and launched one business, Alma Care, a postnatal retreat centre in Toronto. Simple Ventures poached Hana McConville, co-founder of juice company Greenhouse, to lead the company as CEO. 

Alma Care borrows from a tradition McConville said is common in China, in which mothers focus on their own rest and recover in the weeks immediately after giving birth. “The belief is that in order for the baby to be taken care of properly, the mother needs to be well rested,” said McConville, who was herself six months postpartum when Simple Ventures tapped her to lead Alma Care. 

Postnatal retreat centres are common across Asia and cropping up in Europe and the U.S. Alma Care’s Toronto facility—which is located in the Kimpton Saint George, a boutique hotel in the city’s Annex neighbourhood—is the first of its kind in Canada, McConville said. She hopes to eventually expand into other cities. 

While Simple Ventures isn’t focused on specific sectors, Zimmer said the concepts they’re considering are currently skewing towards wellness, digital health, vertical software as a service and the fresh and frozen food space. 

Unlike the traditional venture capital model, Simple Ventures is building businesses that don’t require a lot of outside funding, said Katchen. They will follow business models that have worked in other markets, proving that there’s commercial interest in their products or services. “One of the benefits of the model is, because we’re starting with proven concepts, we really de-risk what is traditionally the most risky part of starting a new company—‘Does anyone want what I’m selling?’” Katchen said. The companies should also generate revenue at the outset and have a clear path to profitability, he said. 

Zimmer said the model has so far been appealing to prospective CEOs. “The feedback has been, ‘Wait a minute, you’ve already got an idea, you’ve already got the initial customers, you’ve got capital, which is hard to come by in this market, and you’ve got a distribution advantage—and I can pull a salary from the investment? Is this real?’” she said. 

Katchen said the studio gives the seasoned business leaders backing it a way of “paying it forward and supporting the next generation of entrepreneurs,” he said. “Selfishly,” he added, “it’s solving problems for all of us who want to make our lives in Canada, and wish that all of the great things we see in New York and the States and Europe existed here.” 

Simple Ventures is in the process of incubating several more companies, said Zimmer, with the goal of launching three to five new businesses a year. Along with mining their networks for ideas, the firm is soliciting proposals from the public. “The ask is to any Canadian, if there’s something you’ve seen in Asia, in Europe, in Australia, in Brazil that you really wish was in Canada, tell us and we’ll try and see if there’s an opportunity to bring it here.”