Key Takeaways
- • University of Waterloo is committing up to $5 million from its $800 million endowment to launch Velocity Fund II (VFII), marking the first time the institution has deployed endowment capital directly into a venture capital fund.
- • The fund, led by general partners Ross Robinson and Akash Vaswani, is targeting a total raise of $25 million USD with a first close targeted for Q1 2024, investing $25,000 to $500,000 per check at pre-seed and early-seed stages.
- • Velocity, the university's startup incubator, has generated significant track record: 400+ companies incubated over 14 years have collectively raised $4.5 billion, including notable exits like Faire (valued over $12 billion) and ApplyBoard ($4 billion CAD post-money valuation in 2021).
- • The initiative follows an emerging trend among leading U.S. universities, such as MIT, deploying endowment capital into venture funds to support early-stage deep tech companies and strengthen university-startup ecosystem linkages.
Summary
The University of Waterloo has approved a strategic allocation of up to $5 million from its $800 million endowment to establish Velocity Fund II, a for-profit venture capital fund. According to the university's Board of Governors, this represents the first instance of Waterloo deploying endowment capital directly into venture investing, positioning the institution at the forefront of a broader trend emerging among North American universities seeking to capitalize on their startup ecosystems.
Velocity Fund II will be managed by general partners Ross Robinson and Akash Vaswani, with ambitions to raise a total of $25 million USD. Robinson indicated the fund expects to achieve a first close in Q1 2024. The vehicle will focus on pre-seed and early-seed stage investments, with per-company commitments ranging from $25,000 to $500,000. The fund will invest in both companies originating from Waterloo's Velocity incubator and external startups, though the university's internal pipeline provides a proven sourcing advantage.
The Waterloo Velocity incubator, which spun out this fund, has established a substantial operational track record. Since its launch approximately 14 years ago, Velocity has incubated over 400 companies that have collectively secured $4.5 billion in total funding. Notable alumni include Faire, an e-commerce marketplace connecting retailers and wholesale suppliers that reached a valuation exceeding $12 billion, and ApplyBoard, an international student application platform that achieved a $4 billion CAD post-money valuation when it raised $375 million CAD in Series D funding during 2021.
Adrien Côté, executive director of Velocity, underscored the strategic rationale: "Attracting financial support early on is the key to long-term success for deep tech startups in particular." This statement reflects the fund's alignment with supporting technology-intensive ventures during critical early-stage phases when capital availability remains constrained. The endowment commitment follows precedent set by U.S. institutions like MIT, which have similarly deployed capital to formalize venture investing within their innovation ecosystems.
Velocity Fund II will be managed by general partners Ross Robinson and Akash Vaswani, with ambitions to raise a total of $25 million USD. Robinson indicated the fund expects to achieve a first close in Q1 2024. The vehicle will focus on pre-seed and early-seed stage investments, with per-company commitments ranging from $25,000 to $500,000. The fund will invest in both companies originating from Waterloo's Velocity incubator and external startups, though the university's internal pipeline provides a proven sourcing advantage.
The Waterloo Velocity incubator, which spun out this fund, has established a substantial operational track record. Since its launch approximately 14 years ago, Velocity has incubated over 400 companies that have collectively secured $4.5 billion in total funding. Notable alumni include Faire, an e-commerce marketplace connecting retailers and wholesale suppliers that reached a valuation exceeding $12 billion, and ApplyBoard, an international student application platform that achieved a $4 billion CAD post-money valuation when it raised $375 million CAD in Series D funding during 2021.
Adrien Côté, executive director of Velocity, underscored the strategic rationale: "Attracting financial support early on is the key to long-term success for deep tech startups in particular." This statement reflects the fund's alignment with supporting technology-intensive ventures during critical early-stage phases when capital availability remains constrained. The endowment commitment follows precedent set by U.S. institutions like MIT, which have similarly deployed capital to formalize venture investing within their innovation ecosystems.
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