Good afternoon, Mr. Chairman and members of the committee. My name is Chris Arsenault and I am the CEO of iNovia Capital.
I would first like to thank the members of the committee for inviting us here today. We are very pleased to share with you our comments and concerns concerning the bill's provisions aimed at gradually eliminating the labour-sponsored funds tax credit.
I will briefly introduce iNovia Capital so that you can see where we fit in the ecosystem of Canadian venture capital.
iNovia is currently one of the largest venture capital fund managers in Canada. We manage some $270 million allocated among three different funds. The most recent one, Fund III, was closed just under two years ago and invests in information technology startup companies.
Since iNovia capital was launched in December 2001, it has invested in 47 Canadian high tech startups. Of that number, 27 are still active and remain in our 3-fund portfolio. These three companies now employ 1,250 people. They have attracted over $330 million in Canadian and foreign capital and have generated over $260 million in revenues in the past 12 months. There is no doubt that most of these companies would not have been launched or succeeded as well without the involvement of iNovia and our partners.
Our first investment fund of $46 million was created in December 2001, with the Fonds de solidarité FTQ holding around 21% of the capital owing to an investment of $10 million. Fourteen university spin-offs have been created.
Our second fund was created in April 2007 from a total of $112 million from some 30 investors. Some of the largest investors in this fund are the Fonds de solidarité FTQ Fondaction and FIER Partenaires, of which the Fonds de solidarité FTQ and Fondaction are major partners. Taken together, these three entities account for over 30% of our Fund II, which has invested in more than 17 Canadian startups since 2007.
Finally, our Fund III was launched in December 2011, using $111 million committed by 27 investors. Teralys Capital is our largest investor and partner, having put in $50 million, or 45% of the fund. The Fonds de solidarité FTQ holds a 33% partnership in Teralys Capital.
As you can see, iNovia is a very active investor in early-stage technology companies in Canada. The highly innovative companies we back are creating high-paying jobs and are making Canada a place to build industry leaders.
I offer a few examples. We backed and enabled the growth of a company called CoolIT, based in Calgary. Now with 20 employees, it is already establishing itself as a worldwide leader in computer liquid cooling. A four-year-old company out of Montreal, Beyond The Rack, now has over 300 employees, generating over $100 million in revenue. That company has three VC funds, all backed by the Fonds de solidarité FTQ.
iNovia, as is the case for many other Canadian VC funds, has been very fortunate in being able to benefit from the direct and indirect financial implications of the labour-sponsored funds. I believe it's safe to state that none of our funds, II or III, could have existed without the direct or indirect financial implications of the Fonds de solidarité FTQ and Fonds d'actions.
Labour-sponsored funds, and more particularly the Fonds de solidarité FTQ, have become a vital part of Canada's venture capital ecosystem. iNovia fully endorses the opinions expressed by Canada's Venture Capital & Private Equity Association in its July 23 letter addressed to the honourable Minister of Finance, Mr. Flaherty. With all due respect, we believe the federal government has understated the importance and impact labour-sponsored funds have on the Canadian economy. We therefore respectfully request that the government reconsider its proposal to progressively eliminate the federal tax credits of labour-sponsored funds as proposed in the 2013 budget.
Mr. Chairman, I wish to thank you and all committee members for listening to iNovia's position on this matter. It will be my pleasure to answer any questions.