OpenText Corp (NASDAQ: OTEX; TSX: OTC) has launched a $100 million venture capital fund focused on investing directly in entrepreneurs engaged in creative business application development. The OpenText Enterprise Applications Venture Fund, which is expected to close within the next six months, was announced concurrently with the initial close of the $300 million Northleaf Venture Catalyst Fund, a venture fund-of-funds backed by the Canadian and Ontario governments, and to which OpenText has also made a capital commitment. The company said that its new Enterprise Application Venture Fund builds on its AppWorks developer platform, established in Nov. 2013. Based in Waterloo, Ontario, OpenText is an enterprise information management and software company.
OpenText Unveils Canadian Venture Capital Strategy: Lead Industry Sponsor in Canadian $217m VCAP Fund of Funds; Announces $100m Enterprise Application Fund to Close in mid-2014
Company Expects to Close on OpenText Enterprise Applications Venture Fund Within Six Months; Enables App Development & Entrepreneurship with AppWorks Platform
WATERLOO, Ontario, Jan. 21, 2014 /CNW/ – OpenText™ (NASDAQ: OTEX, TSX: OTC), the global leader in Enterprise Information Management (EIM) and Canada’s largest software company, today announced it is the lead industry sponsor in a newly created ‘fund of funds’ that will invest in high-potential venture capital fund managers across Canada to seed innovation. The company also expects to close in the next six months with its financial partners, a $100 million OpenText Enterprise Applications Venture Fund to infuse funding directly into creative app development. OpenText announced in November, 2013 its own AppWorks developer platform to dramatically accelerate the time to market for enterprise-grade applications.
“Canadian entrepreneurs have talent, skill and passion, but have limited access to venture capital and technology to take their ideas from concept to commercialization,” said OpenText President and CEO Mark J. Barrenechea. “OpenText is committed to supporting Canadian innovation by helping to level the playing field for global competition. Our investment on multiple levels – fund of funds, direct funding to entrepreneurs, and an app platform to build on — will have positive impact regionally, provincially and nationally.”
The announcements were made at a Venture Capital in Canada event sponsored by OpenText, hosted by Waterloo Region tech organization Communitech, and with participation from Canada’s Minister of State Gary Goodyear and Premier of Ontario Kathleen Wynne. The event was staged today at the Tannery building in downtown Kitchener which houses Communitech’s 44,000-square-foot incubation hub. The provincial government is among the institutional investors in the fund along with lead industry sponsor OpenText.
Minister Goodyear told the audience comprised of entrepreneurs, students, Waterloo Region tech leaders, staff of Communitech and OpenText that Northleaf Capital Partners has been selected as fund manager for the new fund of funds established under the federal government’s Venture Capital Action Plan (VCAP). See government press release here.
Prime Minister Stephen Harper announced the VCAP program in January, 2013 in response to recommendations provided in “The Jenkins Report”, a report created by the Panel on R&D chaired by Tom Jenkins, Chairman of OpenText and Chair of the Canadian Digital Media Network.
“Today’s announcement addresses a gap in our innovation system in Canada,” said Mr. Jenkins. “This is a positive step to support Canadian entrepreneurial activity and drive the creation of new, high-quality jobs and opportunities in the digital economy.”
While the VCAP fund of funds will infuse funding into a Venture Capital Fund which then provides funds to startups, OpenText’s new Enterprise Application Venture Fund will provide funding directly to entrepreneurs, broaching the issue of a funding gap for innovation on two fronts. The goal of the Enterprise App Venture Fund is to seed business application development and spur innovation and entrepreneurship in Canada. The OpenText Enterprise App fund will directly support promising companies leveraging innovative ideas that drive productivity for customers, fueling the tech ecosystem and possibly enabling ‘the next big thing’ in tech. OpenText will be a minority investor in each fund, with financing to occur over a number of years consistent with the fund investment profile.
“Today’s announcement is incredibly important for the technology sector in Canada” said Iain Klugman, CEO of Communitech, “as the addition of risk capital will provide opportunities for Canadian entrepreneurs to start and grow companies here at home. Access to capital is one of the key ingredients in building a world class technology cluster, and this announcement ensures the next generation of companies in Waterloo Region will have access to the capital necessary to build their companies and compete internationally.”
The announcement of the OpenText Enterprise Application Fund follows closely on availability of OpenText AppWorks, the new OpenText Developer platform announced and delivered for developers in November at OpenText’s largest-ever user conference Enterprise World. AppWorks is an HTML5 Enterprise Apps platform leveraging OpenText EIM Suites to dramatically accelerate time-to-market for Enterprise-grade applications which developers can write once and have run on mobile devices and web browsers without additional effort. Coupled with access to Open Data, OpenText envisions unleashing the imagination of app developers globally, creating enterprise quality innovations. Entrepreneurs can get on board at: https://developer.opentext.com
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OpenText provides Enterprise Information Management software that helps companies of all sizes and industries to manage, secure and leverage their unstructured business information, either in their data center or in the cloud. Over 50,000 companies already use OpenText solutions to unleash the power of their information. To learn more about OpenText (NASDAQ: OTEX; TSX: OTC), please visit: www.opentext.com.
Certain statements in this press release may contain words considered forward-looking statements or information under applicable securities laws. These statements are based on OpenText’s current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which the company operates. These statements are subject to important assumptions, risks and uncertainties that are difficult to predict, and the actual outcome may be materially different. OpenText’s assumptions, although considered reasonable by the company at the date of this press release, may prove to be inaccurate and consequently its actual results could differ materially from the expectations set out herein. For additional information with respect to risks and other factors which could occur, see OpenText’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other securities filings with the SEC and other securities regulators. Unless otherwise required by applicable securities laws, OpenText disclaims any intention or obligations to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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