Key Takeaways
- • Velocity Fund II, backed by the University of Waterloo endowment, achieved an initial close of $10 million USD ($14 million CAD)—the first venture capital fund supported by a Canadian university endowment—targeting a final close of $25 million USD.
- • The University of Waterloo committed $5 million CAD to the fund at launch in 2023 and has deployed $2 million USD ($2.8 million CAD) for this first close, representing a material allocation from its $525 million endowment.
- • The fund has already deployed capital into five early-stage startups and maintains a check-size range of $25,000 USD to $1 million USD, focusing on pre-seed and seed-stage ventures in the Waterloo region and beyond.
- • Limited partners include the University of Waterloo endowment, Graphite Ventures, AngelList Systematic Fund of Funds, and prominent Waterloo alumni, with fund management led independently by general partners Akash Vaswani and Ross Robinson.
- • This structure represents a strategic pivot for Canadian university endowments to deploy capital into venture assets—signaling institutional appetite for early-stage venture participation in domestic tech ecosystems.
Summary
Velocity Fund II has closed its first institutional funding round at $10 million USD ($14 million CAD), marking a watershed moment for Canadian university endowment participation in venture capital. The fund, spun out from the University of Waterloo's Velocity incubator, represents the first occasion a Canadian university endowment has committed capital directly to a venture fund structure. The fund targets a final close of $25 million USD and has already deployed capital into five early-stage startups within and outside the Waterloo ecosystem.
The University of Waterloo endowment, valued at $525 million as of fiscal year 2024, initially pledged $5 million CAD when the fund launched in 2023 and has contributed $2 million USD ($2.8 million CAD) to this first close. This institutional deployment reflects a deliberate strategy to allocate endowment capital toward venture-stage companies, a historically under-weighted asset class for Canadian university funds. The fund's limited partner base extends beyond the university to include Graphite Ventures, AngelList Systematic Fund of Funds, and Waterloo alumni investors, diversifying governance and reducing concentration risk.
Velocity Fund II maintains a disciplined investment thesis focused on pre-seed and seed-stage companies, with check sizes ranging from $25,000 USD to $1 million USD. General partners Akash Vaswani and Ross Robinson operate the fund independently from both the university and the Velocity incubator, establishing operational separation while retaining strategic alignment. This governance structure addresses potential conflicts of interest while preserving the fund's integration with Waterloo's broader entrepreneurship infrastructure.
The announcement carries strategic implications for Canadian institutional capital deployment. As Jesse Rodgers of Builders Club noted in commentary on the fund, "If we're serious about building a country, our endowments need to open up and take some risks and invest in Canadians." This first close validates institutional appetite for Canadian early-stage venture exposure and may catalyze additional university endowments to consider similar direct venture allocations, potentially widening the capital pipeline for early-stage founders outside traditional venture markets.
The University of Waterloo endowment, valued at $525 million as of fiscal year 2024, initially pledged $5 million CAD when the fund launched in 2023 and has contributed $2 million USD ($2.8 million CAD) to this first close. This institutional deployment reflects a deliberate strategy to allocate endowment capital toward venture-stage companies, a historically under-weighted asset class for Canadian university funds. The fund's limited partner base extends beyond the university to include Graphite Ventures, AngelList Systematic Fund of Funds, and Waterloo alumni investors, diversifying governance and reducing concentration risk.
Velocity Fund II maintains a disciplined investment thesis focused on pre-seed and seed-stage companies, with check sizes ranging from $25,000 USD to $1 million USD. General partners Akash Vaswani and Ross Robinson operate the fund independently from both the university and the Velocity incubator, establishing operational separation while retaining strategic alignment. This governance structure addresses potential conflicts of interest while preserving the fund's integration with Waterloo's broader entrepreneurship infrastructure.
The announcement carries strategic implications for Canadian institutional capital deployment. As Jesse Rodgers of Builders Club noted in commentary on the fund, "If we're serious about building a country, our endowments need to open up and take some risks and invest in Canadians." This first close validates institutional appetite for Canadian early-stage venture exposure and may catalyze additional university endowments to consider similar direct venture allocations, potentially widening the capital pipeline for early-stage founders outside traditional venture markets.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.