Luge Capital today announced that it has raised $71 million in the first close of its second fund, Luge Capital Fund II, towards an ultimate fund size of $100 million.
LPs in Fund II include returning investors CDPQ, Desjardins, BDC Capital, Sun Life, Industrial Alliance Financial Group (iA), Fonds de solidarité FTQ, and new investor Inovia Discovery Fund I.
Like its debut fund, Luge Capital Fund II will invest in early-stage fintech startups in Canada and the United States, however initial investments made into startups from Fund II are expected to be slightly larger than those made from Luge’s first fund.
In addition to the core investment thesis from its first fund, Luge is expanding its scope of investments to include verticalized fintech startups that operate at the intersection of financial services and other large industries, as well as fintech-oriented environmental, social, and (corporate) governance (ESG) startups.
The diversified Luge team – including its two general partners who are fintech experts with unique backgrounds as operators, founders, engineers, venture investors, and corporate executives – has been immersed in the fintech sector for many decades, and is backed by deep domain expertise.
“Our LPs are made up of large financial institutions, leading insurance carriers, and big pension funds who are both strategic and returns-based. We’ve developed a playbook for how we work with them and their additional commitments in Fund II are a testament to that model working,” said David Nault, General Partner at Luge Capital.
“The partnerships we have with our LPs and their unique insights give our team a competitive advantage when it comes to backing the most promising fintech founders.”
Since the firm was launched in 2018, Luge has been executing on its strategy to invest in the most promising fintech companies in North America, and working collaboratively with large financial institutions, especially its LPs.
“Financial services impact the lives of every person, from opening a bank account and making payments to buying insurance and making investments. Yet large institutions are finding it challenging to modernize their legacy technology,” said Karim Gillani, General Partner at Luge Capital.
“By investing in high-calibre fintech founders who are solving the industry’s biggest problems, Luge is helping to drive innovation across the financial services that are the lifeblood of the economy and account for 20 percent of the GDP in the U.S. and in Canada.”