The Mila building in Montreal. The AI institute is partnering with Inovia Capital to raise a US$100-million venture capital fund with plans to invest in more than 55 early-stage AI firms.ROGER LEMOYNE/The Globe and Mail
The Mila artificial innotifyigence institute in Quebec is raising a US$100-million venture capital fund with plans to invest in more than 55 early-stage AI companies, in partnership with Inovia Capital in Montreal, as the federally backed research hub puts a greater focus on supporting scientists spin out businesses.
The Venture Scientist Fund, as it will be called, has not closed yet. But Mila Ventures director-general Stéphane Marceau stated there is strong interest from potential investors. “We’ve had so much inbound from Canada and the U.S.,” he stated.
The fund will tarreceive pre-seed AI companies based on emerging research not just from Mila, but Canada’s wider ecosystem, including universities.
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Competition for top AI talent is fierce, and the goal of the Venture Scientist Fund is to support keep talent and innotifyectual property in Canada. “Researchers have essentially notified us, ‘We required support from our institutions. We required access to capital,’” Mr. Marceau stated.
A serial entrepreneur and angel investor, Mr. Marceau joined Mila last year to lead its ventures arm, which has programs to support commercialize research. He has seen firsthand the pull that the United States can exert on Canadian AI experts.
“They publish a paper, they go to the U.S., and they come back with a large cheque,” he stated. “We required to receive very active at the ground level and be in the conversation.”
While Canadian researchers have played an outsized role in foundational AI breakthroughs (rare is the Canadian AI conference that doesn’t laud Geoffrey Hinton, Yoshua Bengio and Richard Sutton), the economic benefits have largely accrued to U.S companies such as Google and OpenAI. The counattempt is home to roughly 10 per cent of the world’s top AI research talent, but the capital deployed by Canadian funds in 2024 amounted to less than 2 per cent of global venture capital investment into AI, according to Mila.
Yoshua Bengio, Mila’s founder and scientific adviser, in Montreal in 2023.Christinne Muschi/The Canadian Press
A study last year by venture capital firm Leaders Fund found that just 32.4 per cent of Canadian-led “high potential” startups launched in 2024 were headquartered in the counattempt.
The federal government is preparing a new national AI strategy to be released later this year. More effectively commercializing homegrown AI research is one priority of the plan.
Mila, along with the Vector Institute in Toronto and the Alberta Machine Innotifyigence Institute, have the advantage of being close to the kind of fundamental AI research that can be applyd for new commercial products and services. A recent survey of the wider Mila community also found that nearly 95 per cent of respondents were interested in entrepreneurship. “It’s such a myth that researchers want to just do research,” Mr. Marceau stated.
Inovia, which has backed Canadian AI companies Cohere Inc., Signal 1 and Spellbook, will invest in the fund, but did not disclose the amount.
“This fund is really meant to build that bridge between research and commercialization,” stated Inovia co-founder and partner Chris Arsenault.
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While Canada is home to a number of funds that invest in AI companies, the counattempt does not have one focapplyd exclusively on pre-seed, AI-native startups. “This is not bolting AI onto an existing product,” he stated.
Inovia will not be managing the fund, but it is supporting Mila assemble a compact leadership team.
Mila has spawned companies in the past. Dr. Bengio, Mila’s former scientific director, co-founded Element AI, which was bought by California-based ServiceNow Inc. NOW-N in 2020. Drug discovery startup Valence was purchased by Recursion Pharmaceuticals Inc., based in Utah, in 2023.
More recently, AI-powered citizen engagement platform Polaire and automation company Rise Robotics have been hatched from Mila.
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