Ontario Teachers’ VC Arm Doubles Down on Late Stage Amid Cool-Off

• Avid Larizadeh-Duggan is betting big on late-stage startups for Ontario Teachers’ Pension Plan.
• Teachers’ Venture Growth, the fund’s VC arm, wants to triple its portfolio to $25 billion by 2026.
• Her bullishness comes as other big investors cool on late-stage startups.

For many investors, the late-stage party of private markets has lost much of its luster since the start of 2022. But for Avid Larizadeh-Duggan, the party is just getting started. 

As the EMEA head of Teachers’ Venture Growth, the rebranded venture capital arm of the Ontario Teachers’ Pension Plan, which manages C$241.6 billion ($192.6 billion) in net assets, Larizadeh-Duggan wants to dive in where others are backing out.

The VC unit currently manages a C$7.1 billion ($5.6 billion) portfolio made up of 20 direct investments in companies such as chip firm Graphcore and fintech Lendable  — as well as several partnerships with VC firms globally — and it now wants to more than triple its portfolio to $25 billion by 2026.

But rising inflation, geopolitical uncertainty, and headwinds from the pandemic have bruised some other big names exposed to the rout on public markets, forcing them to reconsider late-stage bets without a clear exit path.

New York-based hedge fund Tiger Global, for instance, told investors in February that it would be turning its attention to earlier stage startups raising Series A and B rounds amid the decline in public tech stocks, according to The Information.

But for Larizadeh-Duggan, a former investor at Google Ventures and Accel, the exodus from late-stage investing presents a “great opportunity” as there will be fewer competitors. 

“The crossovers that were more exposed to public markets now have to be careful, so it might create a bit of a vacuum at the late-stage,” she said.

She added that Teachers’ Venture Growth had “the privilege of being very long-term investors” given the longer-term horizons over which pension funds operate.

“There will be macroeconomic moments in time where things won’t be going straight up in a J-curve so we’re not worried. This has happened before,” she said. “What it forces us to do and forces a lot of investors to do is focus, to really be disciplined.”

Larizadeh-Duggan’s conviction as an investor, a career she started in 2006, also comes from having been on the opposite side of the table as a tech entrepreneur, having cofounded online jewelry retailer Boticca and serving as chief operating officer at Kobalt Music Group.

In Europe, Larizadeh-Duggan sees great potential for the startup ecosystem to mature, viewing the market as one that is “still at the beginning of its growth”, despite there being more than 100 European unicorn startups worth over $1 billion, according to Crunchbase data.

She recognizes there is work to be done, as Teachers’ Venture Growth will need to build its brand and recognition among entrepreneurs more familiar with establishment VC firms such as Sequoia, Andreessen Horowitz, and Index Ventures. 

Part of that work will also mean proving to entrepreneurs that the fund is in it for the long haul, and not just another one of those “tourist investors that come in when there’s good weather and lots of good valuations” who then disappear “when those valuations go away.”