Luge Capital Announces $71 Million First Close of Second Fund

Luge Capital today announced that it has raised CA$71 million in the first close of its second fund, Luge Capital Fund II, towards an ultimate fund size of $100 million. LPs in Fund II include returning investors CDPQ, Desjardins, BDC Capital, Sun Life, Industrial Alliance Financial Group (iA), Fonds de solidarité FTQ, and new investor Inovia Discovery Fund I.

Like its debut fund, Luge Capital Fund II will invest in early-stage fintech startups in Canada and the U.S. that are led by exceptional founders with a drive to affect change globally. In addition to the core investment thesis from its first fund, Luge is expanding its scope of investments to include verticalized fintech startups that operate at the intersection of financial services and other large industries, as well as fintech-oriented environmental, social, and (corporate) governance (ESG) startups. Initial investments made into startups from Fund II are expected to be slightly larger than those made from Luge’s first fund.

The diversified Luge team – including its two general partners who are fintech experts with unique backgrounds as operators, founders, engineers, venture investors, and corporate executives – has been immersed in the fintech sector for many decades, and is backed by deep domain expertise. Since the firm was launched in 2018, Luge has been executing on its strategy to invest in the most promising fintech companies in North America, and working collaboratively with large financial institutions, especially its LPs.

“Our LPs are made up of large financial institutions, leading insurance carriers, and big pension funds who are both strategic and returns-based. We’ve developed a playbook for how we work with them and their additional commitments in Fund II are a testament to that model working,” said David Nault, General Partner at Luge Capital. “The partnerships we have with our LPs and their unique insights give our team a competitive advantage when it comes to backing the most promising fintech founders.”

“Financial services impact the lives of every person, from opening a bank account and making payments to buying insurance and making investments. Yet large institutions are finding it challenging to modernize their legacy technology,” said Karim Gillani, General Partner at Luge Capital. “By investing in high-calibre fintech founders who are solving the industry’s biggest problems, Luge is helping to drive innovation across the financial services that are the lifeblood of the economy and account for 20 percent of the GDP in the U.S. and in Canada.”

Luge invested in 21 companies from the roughly $85 million raised for Luge Fund I. Notable investments include Flinks (acquired by National Bank of Canada in 2021), Plooto, Owl, Flare, and OneVest.

Luge Capital Fund II was announced today at the Canada Fintech Forum 2023 taking place in Montreal through September 27, where the Luge team is sharing its expertise on a variety of fintech topics, including as a panelist for Winning Strategies for Embedded Insurance (11:15 a.m. – 12 p.m.), moderating Navigating the Fintech Investment Landscape (3 p.m. – 3:45 p.m.), and leading the closing keynote interview (4 p.m. – 4:45 p.m.) on the event’s first full day of programming.