Yaletown Partners has secured $100 million CAD in the first close of its Innovation Growth Fund III (IGF III), with a final target of $250 million.
The fund will continue Yaletown’s thesis of backing digital infrastructure technologies that enable the transformation of asset-heavy industries.
Existing LPs double down as market conditions tighten
Despite a challenging VC fundraising environment, Yaletown Partners raised the first close in just six months. Backers include BMO Capital Partners, InBC, Export Development Canada, Farm Credit Canada Capital, an undisclosed Canadian pension fund, and several family offices. Notably, InBC made its first-ever follow-on venture commitment, after investing in IGF II.
Managing General Partner Salil Munjal described the market as one of the toughest in a decade: “Our conviction has never been stronger that investing in technologies enabling the digital transformation of asset-heavy industries is the most scalable lever for industrial competitiveness — and excellent returns.”
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Fund to focus on Series A & B rounds in North America
IGF III will invest primarily in Series A and B companies across North America, with a strong bias toward Canadian startups. Sectors include advanced analytics, edge computing, networking, and physical AI. The firm is particularly interested in startups improving productivity, resiliency, and sustainability in energy, manufacturing, logistics, agriculture, and transportation.
Yaletown Partners has yet to announce its first investment from IGF III but says it has “a couple opportunities in diligence.”
Track record from IGF II fuels momentum
Yaletown attributes its fast raise to the performance of IGF II, which is already generating ongoing distributions to LPs. That momentum helped the firm exceed its previous fund’s final close of $200M CAD in 2023.
Founded in 2001, Yaletown Partners now manages approximately $600 million in active capital across its funds, and maintains offices in Vancouver, Calgary, Edmonton, Toronto, Montréal, and San Francisco. Its portfolio includes companies like Elevated Signals, Innerspace, and Inverted AI.
