North America is “best positioned to weather the current and future economic storms,” said global managing partner Damien Steel.
Pulling out of the European market, OMERS Ventures has opted to refocus its investment efforts on Canada and the United States (US) amid the market downturn.
BetaKit confirmed the move with OMERS Ventures, which was first reported by Bloomberg.
As part of the move, Harry Briggs has been let go, while fellow OMERS Ventures European managing partner Jambu Palaniappan is joining Checkatrade as its next CEO.
“We have made the decision to shift our focus to North America because we believe it is best positioned to weather the current and future economic storms,” Damien Steel, OMERS Ventures’ global managing partner and head of ventures, told BetaKit in a statement.
The retreat comes just four years after OMERS Ventures began ramping up its focus on the region with a €300-million fund for European startups followed closely by its first $750-million USD transatlantic fund.
It marks a near-term departure from OMERS Ventures’ global ambitions, which the firm told BetaKit remain—albeit now on a longer timeline.
Going forward, the majority of OMERS Ventures’ new investments will be in North American firms, where it also plans to open a new New York office. From there, OMERS Ventures intends to continue to support its European portfolio companies, retain existing board seats, and explore possible follow-on financings.
OMERS Ventures had an investment team of four people at its London, United Kingdom (UK) office. Two of those employees are moving to New York: managing partner Henry Gladwyn and an associate. The other two, including managing partner Harry Briggs—who helped spearhead OMERS Ventures’ European expansion—are being let go as part of the move.
For his part, OMERS Ventures managing partner and global head of Europe Jambu Palaniappan recently shared plans to join UK-based tradesperson marketplace Checkatrade as its next CEO.
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Following the transition, OMERS Ventures will have three offices and a physical presence in Toronto, New York, and San Francisco.
Launched in 2011, OMERS Ventures is the early-stage venture capital (VC) arm of the Ontario Municipal Employees’ Retirement System (OMERS), one of Canada’s largest pension funds. OMERS Ventures has backed Canadian tech success stories like Shopify and Wave.
In recent years, investing in European startups had become more of a focus for the firm, which launched a €300 million fund for European startups in 2019.
OMERS Ventures shut down that fund when it launched its first transatlantic fund, a $750-million USD fund, in 2020. At the time, OMERS Ventures allocated 40 percent of that amount toward Europe. OMERS Ventures declined to confirm how much of that capital was allocated in Europe or has now been redirected to North America, noting the firm no longer has specific allocations between geographies. Going forward, OMERS Ventures did say that the majority of its new investments will go toward North American firms.
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In February, BetaKit exclusively reported on OMERS Ventures’ plans to launch a fifth fund this year, deploying between $200 million and $300 million per year annually, with a unified global investment team. The firm confirmed to BetaKit that those plans remain, on a shifted timeline due to market conditions. According to OMERS Ventures, it will consider those previously stated global ambitions again “when the market opens up.”
OMERS Ventures is not alone in facing difficulties in the European market. When VC funding peaked in 2021, many prominent North American venture firms looked across the pond for deals. But as market conditions have deteriorated amid rising interest rates, some foreign VCs have scaled back European investments in favour of domestic deals.
Funding in Europe fell 66 percent year-over-year in the second quarter as American VCs shifted attention homeward. Meanwhile, European VCs are on pace for their worst fundraising year since 2015.
Despite the European exit, Steel said that OMERS Ventures’ “commitment to early-stage venture investing remains strong,” claiming, “We were the first pension plan to do direct early-stage investing, and we remain committed, with $2.5 billion CAD invested in the space.”
Feature image courtesy OMERS Ventures.
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