True North Fund announces second close with three unnamed investments to date.
Communitech announced today the departure of Chris Albinson as CEO after three-and-a-half years at the helm of the Kitchener-Waterloo innovation hub. Despite the split, Albinson will continue his efforts to build a True North Fund.
Communitech CFO Jennifer Gruber has been tapped to serve as interim CEO, and the organization’s board plans to begin the search for a new permanent CEO in the coming weeks.
“Being the CEO of Communitech has been a role of a lifetime.”
Chris Albinson
In a Medium post today, Albinson indicated he is leaving at the end of this year. “It was time,” he wrote. “Being the CEO of Communitech has been a role of a lifetime,” he added, noting it was “both a tremendous privilege and a challenge to support Canada’s founders.”
“On behalf of the board, I would like to thank Chris for all of his contributions and dedication to the organization,” Communitech board chair Catherine Graham said in a statement. A Communitech spokesperson told BetaKit that Albinson would support the transition of CEO responsibilities until Dec. 20, 2024.
Albinson—a venture capital (VC) investor who co-founded C100—took the reins from longtime Communitech CEO Iain Klugman in May 2021. That year on the BetaKit Podcast, Albinson outlined his vision for ensuring that Canadian tech companies own the podium, unveiling the True North Strategy, through which Communitech has sought to help 14 founders reach $1 billion in annual revenue by 2030.
A key component of this strategy was the creation of a new, $200-million CAD, sector-agnostic, pan-Canadian growth-stage-focused VC fund called the True North Fund to focus on the country’s top-performing tech companies.
It appears as though Albinson will carry forward some of the work he laid while at Communitech as managing partner of the True North Fund on a full-time basis starting on Dec. 21. According to an additional announcement today, the True North Fund recently completed the second close of its first fund from undisclosed limited partners with $100 million in total commitments towards its $200-million target, which it had initially hoped to reach in 2022.
BetaKit reached out to Communitech to clarify the organization’s current relationship with the True North Fund, but a spokesperson declined to comment. Albinson confirmed to BetaKit that True North Fund is an independent organization featuring a partnership agreement with Communitech.
That’s not the only change. According to True North Fund’s latest press release, it will focus on investing primarily through secondaries, which appears to be a new development since Communitech began exploring the idea for the fund in 2021.
Communitech told BetaKit back in 2021 that the True North Fund would be a separate entity from Communitech that members of the hub would manage or lead, designed to invest in 30 companies across Canada over 10 years, with initial cheque sizes of $1 million to $5 million, with potential for follow-on investment of up to $30 million.
RELATED: Communitech exploring $200-million venture fund
At the time, Communitech indicated that five percent of carried interest from the fund would be committed to what it called the True North Foundation, which would have an independent board of directors, with the True North Fund itself due to receive 20 percent of net profits on its investments, with no tax dollars or government funding used for the fund.
Initially branded as a Communitech-affiliated investment vehicle, today there is no mention of any affiliation with Communitech on the True North Fund’s website.
The Logic reported last year that Albinson’s True North Strategy for Communitech, and the True North Fund in particular, have become the subject of intense disagreement among folks at Communitech and within the Kitchener-Waterloo and Canadian tech community more broadly, as some have questioned whether this national focus has come at the expense of fledgling local startups—a premise Albinson has previously rejected in response to The Logic.
Another local organization has cropped up since then: late last year, other Kitchener-Waterloo tech leaders teamed up to launch a new community-building platform called Waterloo Inc. to fill a gap in the region that Intellijoint Surgical co-founder and CEO Armen Bakirtzian said has existed since COVID-19. “We saw an opportunity in terms of that local piece that’s missing,” Bakirtzian told BetaKit at the time.
As The Logic reported last year, Communitech has experienced high employee turnover and a drop in membership during the COVID-19 pandemic, as like other tech hubs, including MaRS, Communitech has sought to figure out how best to continue serving startups going forward. This included Communitech shedding 10 percent of its workforce in late 2022.
RELATED: Kitchener-Waterloo tech leaders launch new community-building platform Waterloo Inc.
The announcement comes shortly after Communitech added four new members to its board last month: Magnet Forensics CEO Adam Belsher, Accelerator Centre CEO Ruth Casselman, Mappedin founder and CEO Hongwei Liu, and former National Research Council of Canada president Iain Stewart.
Speaking to Albinson’s departure from Communitech under condition of anonymity, a source familiar with leadership’s thinking said, “I think it’s an opportunity to reset on the mission.”
Communitech released its 2024 annual report last month, which Albinson presented at the organization’s latest annual general meeting on Sept. 19. The report outlined a “refreshed vision for the next three years.”
“The Communitech True North Strategy in 2021 set the course for faster and bigger growth for founders,” the report noted. “We’ll continue to identify, celebrate and support Canada’s high-performing companies as they scale into global superstars. We’ll also continue to listen to feedback from founders and partners, and seize opportunities to adapt and refocus in a rapidly changing environment. This year, we are doubling down on our commitment to elevate Waterloo Region as an innovation hub on the global stage. A strong and vibrant region is essential for a prosperous province and resilient nation.”
Established in 1997, Communitech has seen many iterations. With its operations financed by a combination of government and private partners, Communitech’s website claims that the organization currently serves more than 1,200 members.
RELATED: Communitech CEO Chris Albinson shares his plan to help Canadian tech own the podium
In his Medium post, Albinson claimed that Communitech is currently having its best year. During his tenure, Albinson claimed that Communitech streamlined its programs, increased the founders the organization serves by 32 percent while also expanding its revenue and team.
Communitech generated more than $31 million in revenue for the year ending March 31, 2024, an excess of over $160,000 relative to its expenses, according to its latest annual report. This is up relative to the approximately $20.5 million in revenue and nearly $600,000 net loss Communitech posted for fiscal 2023 and $25.5 million in revenue with an excess of over $300,000 during fiscal 2022. According to Communitech’s website, the organization’s team currently consists of roughly 100 people, an increase from 89 in November 2022.
The True North Fund is co-led by Albinson and fellow managing partner Sean Brownlee, who previously spent time with Export Development Canada and BDC Capital, among others. According to its website, the True North Fund is targeting Canadian tech startups with more than $40 million in annual revenue, at least 40 percent year-over-year growth, and a minimum gross margin of 40 percent.
To date, the True North Fund said it has made three investments into undisclosed “True North companies.”
UPDATE (10/29/24): This story has been updated to include additional context and information from Communitech’s annual reports and BetaKit’s past reporting.
With files from Douglas Soltys.
Feature image courtesy Communitech.
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