By Meagan Simpson, BetaKit (June 2022)
The initial close includes $4 million from the Opportunity Calgary Investment Fund (OCIF). Thin Air’s overall target for its first fund is $100 million.
In addition to OCIF, investors in the fund include Calgary wealth management firm Sandstone Asset Management Inc, other undisclosed family offices, and high-net-worth individuals and entrepreneurs including Hanif Joshaghani (CEO of Symend) and Adrian Camara (CEO of Athennian). Thin Air managing partner James Lochrie told BetaKit that almost all the capital in the initial close comes from the Calgary area. Lochrie called the move intentional and an emphasis on the fund’s goal to invest in local companies.
Thin Air Labs got its start around 2019; around the time that Lochrie and fellow Wave co-founder Kirk Simpson sold the company to H&R Block in 2019 for $537 million CAD. Simpson stayed on at Wave, while Lochrie moved to Calgary, where he has roots, in pursuit of growing Prairie tech. He created Thin Air alongside Jim Gibson and Greg Hart (Gibson has since departed Thin Air for the School for Advanced Digital Technology at the Southern Alberta Institute of Technology).
“It’s just become obvious now [to invest in Alberta tech], whereas five years ago, this was not an obvious play. But today it is.”--- James Lochrie, Managing Partner
Lochrie has been a loud and outspoken advocate for the Alberta tech sector, most notably after outgoing Premier Jason Kenney’s United Conservative Party (UCP) took power in 2019 and cut spending related to tech and innovation. Lochrie was also one of several ecosystem members providing feedback to the province’s Innovation Capital Working Group, which set recommendations that informed the government’s COVID-19 economic recovery plan.
Lochrie has also been an active angel investor in Calgary since 2016, with early cheques in companies like Athennian, Stellaralgo, SomaDetect, and Symend, which raised one of the largest Series B rounds in Alberta history in 2021.
Thin Air Labs Fund I continues Lochrie’s early investing mentally. The venture studio’s aim is to help startups gain initial traction, focusing on early, seed, and seed-plus investments. The fund has already made 17 investments to date, including PayShepherd, Arbor, Fillip, and Provision.
Lochrie noted the growth he has seen in the Alberta tech sector since he began angel investing, arguing that at the time there were few early-stage, scalable companies. Today, Lochrie said Thin Air sees hundreds of companies every month. “It’s just become obvious now [to invest in Alberta tech], whereas five years ago, this was not an obvious play,” he said. “But today it is.”
Thin Air has grown up alongside a group of venture funds also looking to bolster the Prairie tech sector. Regina-based Conexus Credit Union has launched a $30 million venture fund in 2019 that has since sprouted a second fund, Emmertech, which invests in Canadian AgTech. Broad Street Bull VC launched its second fund in 2020 with a focus on re-seed and seed-stage companies in the Prairies. Harvest Builders was created in 2019 by SkipTheDishes co-founder and former CEO Chris Simair, and last year launched an investment fund to support its venture studio, which has backed the likes of Neo.
In the midst of these funds, venture capital investment in Alberta has skyrocketed; in the first quarter of 2022, startups in the province collectively passed a new record for quarterly venture funding. In total, $205.6 million was raised, representing a 212 percent increase from the previous quarter, and a 26 percent increase year-over-year.
“Over the past number of years, there has been growing momentum in the Calgary ecosystem related to seed funding and it continues to accelerate,” Lochrie told BetaKit at the time. “As those companies are maturing, we are starting to see a number of them hit scale and raise more significant investment rounds.”
Beyond its venture fund, Thin Air also provides startup services to both portfolio and non-portfolio companies. These services are twofold: Funding Catalyst and Product Traction, the latter of which expanded to Toronto earlier this year.
In addition to Lochrie, the current team behind Thin Air [Fund I] includes two general partners, Raghu Bharat and Rick Bird, as well as health lead and head of experience Crystal Phillips.
Speaking with BetaKit earlier this year, Lochrie noted that Thin Air had expected to secure $30 million in its initial close. Lochrie explained that the remaining $10 million is still expected to be invested in the fund, but is delayed in due diligence. Thin Air continues to raise towards its $100 million target, with the goal of closing the remaining capital by the end of this year or early next year.
“Our investment in Thin Air Labs Fund I helps to fill a critical gap in supporting pre-seed and seed-stage companies, with the capital and expertise to help them grow local businesses in Calgary.” ---Mark Blackwell, Chair OCIF's Board of Directors
In terms of OCIF’s participation, the City of Calgary-backed group created a fund for early-stage investment into Calgary companies during the first quarter of 2021. Its investment in Thin Air follows deals made with a slew of Alberta-focused funds and programs, including CDL-Rockies, The51, Accelerate Fund, InterGen, and AltaML. In 2021, OCIF also brought Harvest Builders to the province with a $4 million investment. OCIF also leads the city’s participation in Alberta Scaleup and Growth Accelerator program, which has brought international accelerators, like Plug and Play, to the region.
“Our investment in Thin Air Labs Fund I helps to fill a critical gap in supporting pre-seed and seed-stage companies, with the capital and expertise to help them grow local businesses in Calgary,” said Mark Blackwell, chair of OCIF’s board of directors. “The entire Thin Air Labs team has a strong track record of supporting local entrepreneurs and we are excited about our investment in a Calgary-centric venture capital fund that aligns with our vision of growing the Calgary technology and innovation ecosystem.”