Harvest Builders launches venture fund to build on Neo Financial, SkipTheDishes success

SkipTheDishes co-founder and former CEO Chris Simair is looking to increase the Prairies’ notoriety yet again, this time with a newly launched investment fund to support his venture studio, Harvest Builders.

Launching with $14 million CAD in capital to deploy, Harvest Venture Partners was created in partnership with general partner Alex Gold, who brings to the table past venture studio experience with Fortune 100 companies at BCG Digital Ventures in San Francisco.

“We can essentially … have a strength that is a focus in a region that is going to be the Silicon Valley of the future.”
– Chris Simair
 

The venture fund is an extension of Harvest Builders, which Simair created in 2019 to help co-create and support startups in the Prairies.

Harvest Builders had an early win with Neo Financial – created by fellow SkipTheDishes founders Andrew Chau and Jeff Adamson. Neo was the first venture undertaken by the Harvest Builders team, which has secured more than $144 million in funding since it was created in 2019, attracting the attention of notable investors like Peter Thiel’s venture firm, Valar Ventures.

The studio is currently working with a handful of other startups.

Harvest Venture Partners will support the venture studio’s creation efforts by providing companies with financial backing. With Gold at the helm, the fund is meant to invest in six to eight companies over a two-year span.

The launch of Harvest Venture Partners comes as the venture studio model has grown in popularity over the last decade. Canada has seen the emergence of Highline Beta and Power Corp-backed Diagram Ventures as key venture builders and investors in the tech landscape, among others.

“Many investors have now seen the return profiles against the availability of venture studios and there’s now a really strong impetus behind growing the space,” Gold said in an interview.

ATB Financial served as the lead investor for Harvest Venture Partners’ fund. The financial services company is itself a notable investor in innovation in Western Canada, having its own venture and private equity arms.

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Harvest Venture Partners’s limited partners also consist of undisclosed family offices, with a heavy concentration from Western Canada. Gold told BetaKit about 90 percent of the fund’s LPs were local, with the rest a mix of broader Canadian and international investors.

That concentration of local investors is not accidental. An important aspect of Harvest’s strategy, and one where the firm feels it has a competitive advantage, is building up the Prairies tech ecosystem.

“There’s … unprecedented levels of capital being poured into these technologies centres, like Silicon Valley [and] like New York, but the challenge we saw was an oversaturation of investments,” said Simair.

“We look at Calgary [and] the Western market as being more of a mandate not because it’s for the public good, we look at it as more of a competitive advantage,” he added. “We can essentially … have a strength that is a focus in a region that is going to be the Silicon Valley of the future.”

“We believe the time is now to build Western Canada, especially Calgary and Alberta, into a centre of the tech ecosystem,” Gold echoed, noting the presence of big tech players like Amazon already pursuing the region because of its access to talent.

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Helping foster the Prairies ecosystem is nothing new for Simair. With SkipTheDishes (bought by Just Eat in 2016), he ensured the company stayed local in Winnipeg, and it grew from five to 3,000 people in the city.

That, in turn, created a field of new entrepreneurs and companies (like Neo), and, in Simair’s eyes, the opportunity to make billion-dollar companies in the Canadian Prairies.

Western Canada is becoming a more favourable market for tech companies. Venture capital investment data for the year-to-date shows record capital flow to Saskatchewan in particular, and increased investment in Manitoba and Alberta compared to 2020.

Other organizations specifically focused on showcasing and bolstering the early-stage Prairie startups include the likes of Conexus Venture Capital, Broad Street Bull, Thin Air Labs, Intergen, and The51 – in addition to various venture firms that tap into Western Canada, such as Yaletown Partners, Panache Ventures, and Builder VC, among others.

While Harvest is focused on bolstering Prairie tech, its investment thesis moves beyond the region. Gold told BetaKit the venture fund will invest across Canada and the United States, and while having a business presence in Western Canada is preferred, it is not integral.

Harvest Venture Partners is focused on making deals in the financial services space. Gold discussed creating a network of complementary companies in FinTech that disrupt the status quo. As a challenger bank offering, Neo leads Harvest’s charge to disrupt the market. The fund is now eyeing companies in wealth management, insurance technology, real estate, and retirement/estate planning.

The fund, which closed on November 1, has already made two investments. One in wealth and asset management firm OneVest, and another in Walnut, an insurance tech company that provides life insurance as a premium membership.
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Much like Neo, Harvest is continuing its trend of backing return founders, as Walnut was co-created by serial entrepreneur Derek Szeto, whose RedFlagDeals was bought by Yellow Pages Group in 2010.

“The milestone of the fund allows us to take the proof points we’ve already proved out with Neo Financial, and now start building a few more companies in a very strategic, very deliberate effort to capitalize on this opportunity,” said Simair.

Feature image by Thiago Terleski on Unsplash