Today, the Archangel Network of Funds announced that its constituent funds invested a total of $1.2 million during the first 6 months of 2023. The money went to investments in nine, unique, early-stage Canadian companies, along with three follow-on investments.
While a number of reports have recently highlighted the difficulties early-stage companies are having raising capital in 2023, Archangel has continued to see strong deal flow of high-quality companies.
The 2023 numbers compare with $1.4 million invested in seven unique new companies during the same period in 2022 and one follow-on investment.
“While pre-seed and seed deal flow is active, it is softer than in 2022,” commented David Rich, one of the General Partners with StarForge. “We saw founders being cautious about raising follow-on funds in this market, with them raising smaller amounts at valuations that are either flat or a small bump over the prior raise.”
“While great founders are still finding receptive capital on fair terms,” Rich added, “the softer market is making it more difficult for teams who have not yet honed their product-market fit to attract funding.”
Archangel attributes its success to its strong network of ecosystem partners who share information on promising early-stage companies, and its rigorous due diligence processes.
Founded in Kitchener-Waterloo in 2020, the Archangel funds continue to focus on Ontario-based companies, particularly those based in the Toronto to Windsor corridor. While not yet reflected in its data, the funds are increasingly seeing strong deal flow from across Canada as early-stage companies broaden their reach to fill their fund-raising rounds.
So far in 2023, 88% of the investee companies that received initial investments are based in southern Ontario, while one is based in New Brunswick. This compares with 57% of southern Ontario-based companies in the same period in 2022, while 29% were based in northern Ontario and 14% were from outside of Ontario.
Archangel is comprised of four separate angel-stage investment funds – Adrenaline, Axion, Phoenix Fire and StarForge. Each fund has its own, independent, investment thesis while collaborating on deal flow and due diligence. Many of the General Partners are angels or super angels from Ontario’s Waterloo Region. Combined, they bring a wide variety of skill sets and experience to their investment process.
