Key Takeaways
- • Velocity Fund II, backed by the University of Waterloo's endowment, closed its initial funding round at $10 million USD ($14 million CAD), representing the first venture capital fund supported by a Canadian university endowment.
- • The fund targets a total of $25 million USD and has already deployed capital into five startups, focusing on pre-seed and seed-stage investments ranging from $25,000 USD to $1 million USD per cheque.
- • University of Waterloo committed $5 million CAD to the fund in 2023 and has delivered $2 million USD ($2.8 million CAD) for this close, with its endowment valued at $525 million as of fiscal year 2024.
- • Limited partners include Graphite Ventures, AngelList Systematic Fund of Funds, and prominent Waterloo alumni; the fund is independently managed by general partners Akash Vaswani and Ross Robinson.
- • The fund's launch signals a strategic pivot for Canadian university endowments to take "calculated risks" in early-stage venture capital, particularly to support regional tech ecosystems and local entrepreneurship.
Summary
Velocity Fund II has achieved its initial close with $10 million USD in committed capital ($14 million CAD), marking a significant milestone as the first venture capital fund backed by a Canadian university endowment. The fund, spun out from the University of Waterloo's Velocity incubator, is pursuing a target raise of $25 million USD and has already deployed into five startups since launching in 2023.
The University of Waterloo committed $5 million CAD to the fund at inception and has contributed $2 million USD ($2.8 million CAD) to this initial close. This commitment represents the first instance of a Canadian university endowment allocating a portion of its fund to the venture capital asset class. According to Waterloo's audited financial statements for fiscal year 2024, the endowment maintains a valuation of $525 million, providing substantial capacity for continued participation in venture investments.
The fund's limited partner base includes institutional players and strategic investors: Graphite Ventures, AngelList Systematic Fund of Funds, and prominent University of Waterloo alumni. General partners Akash Vaswani and Ross Robinson manage the fund independently from both the university and the Velocity incubator, maintaining operational separation while leveraging the institution's credibility and deal flow.
Velocity Fund II maintains a focused investment thesis centered on pre-seed and seed-stage capital deployment in the Waterloo region and beyond. The fund writes cheques ranging from $25,000 USD for early-signal scout investments to $1 million USD for core positions, targeting high-growth, early-stage ventures both within and outside the Velocity incubator ecosystem. This ticket size positioning allows the fund to support founders at critical inflection points while managing risk across a diversified portfolio.
The fund's launch reflects a broader strategic shift among Canadian institutional investors toward venture capital participation, with Jesse Rodgers of Builders Club noting that "if we're serious about building a country, our endowments need to open up and take some risks and invest in Canadians." This positioning suggests growing recognition among Canadian endowments and institutional capital of venture's role in strengthening regional innovation ecosystems and supporting domestic entrepreneurial talent.
The University of Waterloo committed $5 million CAD to the fund at inception and has contributed $2 million USD ($2.8 million CAD) to this initial close. This commitment represents the first instance of a Canadian university endowment allocating a portion of its fund to the venture capital asset class. According to Waterloo's audited financial statements for fiscal year 2024, the endowment maintains a valuation of $525 million, providing substantial capacity for continued participation in venture investments.
The fund's limited partner base includes institutional players and strategic investors: Graphite Ventures, AngelList Systematic Fund of Funds, and prominent University of Waterloo alumni. General partners Akash Vaswani and Ross Robinson manage the fund independently from both the university and the Velocity incubator, maintaining operational separation while leveraging the institution's credibility and deal flow.
Velocity Fund II maintains a focused investment thesis centered on pre-seed and seed-stage capital deployment in the Waterloo region and beyond. The fund writes cheques ranging from $25,000 USD for early-signal scout investments to $1 million USD for core positions, targeting high-growth, early-stage ventures both within and outside the Velocity incubator ecosystem. This ticket size positioning allows the fund to support founders at critical inflection points while managing risk across a diversified portfolio.
The fund's launch reflects a broader strategic shift among Canadian institutional investors toward venture capital participation, with Jesse Rodgers of Builders Club noting that "if we're serious about building a country, our endowments need to open up and take some risks and invest in Canadians." This positioning suggests growing recognition among Canadian endowments and institutional capital of venture's role in strengthening regional innovation ecosystems and supporting domestic entrepreneurial talent.
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