Vancouver-based venture capital firm Yaletown Partners has raised $100 million for its Innovation Growth Fund III, two years after closing its predecessor fund. The company is aiming to raise $250 million total within the next year.

Investors in the fund so far include BMO Capital Partners, provincial government fund InBC Investment Corp and federal Crown corporations Export Development Canada and Farm Credit Canada. Other investors have backed the fund, which Yaletown isn’t yet disclosing, including one Maple 8 pension fund, managing partner Salil Munjal told The Logic. 

Yaletown’s strategy for the fund is the same as the first two iterations: to invest in technology companies that aim to make sectors like farming, transportation, logistics and manufacturing more efficient. “It’s about the very industries that are the cornerstone of Canada’s GDP,” said Munjal. The fund will invest in companies in the scale-up phase, raising late series A and series B rounds. A large majority of the capital will go to Canadian firms, said Munjal.

Yaletown, which manages more than $600 million in assets across multiple funds, raised the first $100 million in about six months, said Munjal, faster than any first close in the firm’s history. 

That experience is at odds with many venture firms, both in Canada and globally, that have tried raising new funds in the past few years. The exit market started plummeting in early 2022, with few venture-backed companies going public or being acquired. That’s left investors with little cash to invest back into companies or funds. Canadian venture capital firms closed just 27 new funds in 2024, according to PitchBook, the fewest since 2016.

Munjal said several Yaletown portfolio companies have managed to exit, despite the challenging market. They include Calgary-based medtech firm Circle Cardiovascular Imaging, which sold to Thoma Bravo in 2022, and Longueuil, Que.-based energy infrastructure firm Vizimax, bought by Blackstone portfolio company Power Grid Components in 2024. Those deals have given investors cash and confidence to reinvest in the latest fund, said Munjal. 

Yaletown’s focus on industrial technology also happens to be particularly interesting to investors right now, Munjal claimed, as Canada’s economic relationship with the U.S. frays. “I think everyone recognizes that technology is the great enabler of driving those productivity gains to make provinces and countries competitive,” he said.