The university has put together a $1m fund for health-oriented participants in its Velocity accelerator competition.
University of Waterloo has raised $1m from undisclosed investors for a second fund targeting participants in its Velocity startup competition, this time targeting the medtech space.
The figure meets Waterloo’s initial fundraising target just four weeks after the vehicle opened to LPs, described as mainly individual healthcare-sector investors.
Velocity HealthTech Fund will supply health-oriented Velocity contestants with up to $50,000 of pre-seed funding, augmenting $50,000 on offer to the winners from the existing Velocity Fund.
The investments are expected to help with healthcare-specific challenges such as navigating regulatory roadblocks.
HealthTech Fund’s portfolio already includes personalised medical travel services provider Caribou and portable lab instrument supplier Life Sciences Key Technologies. The latter received $50,000 from each of the Velocity funds.
The Velocity competition runs three times a year with participants including members of the Waterloo-run Velocity Garage accelerator.
Waterloo raised the first $1.2m to $1.8m Velocity fund in early 2019 to complement its earlier prize funding structure, now phased out entirely in favour of equity-based investments. Velocity Fund provides up to $60,000 to as many 12 “worthy” businesses in the contest each year.
Adrien Côté, executive director of Waterloo’s entrepreneurship program, Velocity, said that the inaugural fund had demonstrated there was enough investor appetite for Canada-based early-stage startups.
He added: “Focusing our second fund on health tech only made sense given that 38% of the companies we have in our incubator operate in this space, a trend we only see increasing over time.
“Access to additional early capital allows founders to tackle unique, and often costly, aspects of building a health tech company.”
– Feature image courtesy of University of Waterloo
