Brahm Klar, managing partner, Round13
Capital.
The principals of Round13 Capital believe so much in the
companies they partner with, they even share corporate office space
with one of them. On any given day there could be two golden
retrievers and a golden doodle roaming about the office thanks to
Toronto-based pet health platform Juno Veterinary, a growth-stage
company Round13 Capital invested in last year.
“We definitely have a very dog-friendly office,” says
Brahm Klar, managing partner of Round13 Capital.
Round13
Capital is a venture and growth equity investment company based
in Toronto, with approximately $700 million in assets under
management. The firm invests in high-potential companies across a
range of sectors, with a focus on supporting their growth and
development over the long term, specializing in three sectors:
software, tech-enabled services and digital transformation
(investing in legacy businesses and deploying technology to drive
growth and efficiency).
“As a general rule, Round13 tends to focus on developing
investment themes, and then conducting detailed bottoms-up due
diligence, as opposed to chasing macro trends,” Brahm
explains.
As an example, the firm has spent time on healthcare in Canada
over the last year, looking for businesses with exceptional
products, durable moats, and attractive risk-reward dynamics, which
will benefit from increasing demand for healthcare services and
information. This resulted in Round13 leading PocketHealth’s
$45 million Series B fundraise in early March. PocketHealth gives
patients access, control, and a deeper understanding of their
health records while streamlining the way healthcare providers
share medical imaging.
Although 2023 was a slow year for the venture growth industry,
it was an exciting period for Round13.
“We closed $300 million in new funds to deploy across
Canada. We completed our first two investments in exciting
businesses and amazing teams — Juno Vet and PocketHealth
— and added two exceptional investment professionals to our
team,” says Brahm. “Sometimes the market can be slow
overall, but it was still a good time to be building our business
at Round13.”
Juno Vet is a chain of veterinary clinics in
Toronto that was founded in 2022 and aims to provide a different
kind of pet-care experience to clients with a membership-based
service which includes 24/7 virtual care, transparent pricing and
state-of-the-art facilities.
“Juno Vet allows vets and their support staff to focus on
providing great care for the animals and a great environment to
work. There are three clinics opened now with two more coming in
Toronto and the first in Vancouver later this year,” he
says.
Round13 has seen more activity in the early part of 2024, with
more companies coming to market to raise capital.
“Bid-ask spreads are narrowing (a combination of reduced
valuation expectations, and an improvement in metrics over the last
year). Overall, we expect 2024 to be busier year than 2023,
although the spectrum of deals will cover a wide range from the
hottest AI opportunities to distressed deals,” says Brahm.
“Businesses now generally appreciate that we are not going
back to the pricing dynamics of a few years ago. I think you’re
going to see more meeting in the middle on deals in the next little
while.”
Working with Osler’s Emerging and High Growth Companies
team
Brahm’s experiences with Osler began long before he started
with the venture capital company.
“Round13 has a long history with Osler. Personally, my
first interaction with Osler goes back a decade as an analyst in
the M&A group at RBC Capital Markets working on the $13 billion
sale of Tim Hortons to Burger King,” says Brahm.
More recently, Round13 developed a relationship with another
Osler partner.
“Our close connection is with Chima Ubani who has been a
wonderful partner and who does all our fund formation work.
We’ve worked with Osler on many growth investments, and
it’s always been a great experience,” says Brahm.
“You need to find a person that fits with your style and
values. My advice to founders is find the person you can build a
long-term, trusted relationship with.”
Advice for founders — focus on the next business
milestone
When sharing his wisdom with founders, Brahm says the focus
should be on building the business and less so on where the next
raise will come from.
“We start by acknowledging the incredible fortitude
required to be an entrepreneur — every day brings new
challenges and starting a business is a laudable undertaking.
Specifically, we have been spending time lately talking with
founders about maximizing the odds of success as opposed to the
speed of success. The growth-at-all-costs era seems to be behind
us, and frankly never really made much sense to Round13. Our view
is getting to the next business milestone matters a lot more than
getting to the next fundraising milestone,” he says.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
#Round13 #Capital #Greater #Activity #Early #Companies #Market #Management
