Voyager Capital is ditching California and doubling down on the Pacific Northwest — with a new interest across the border up north.
The Seattle-based venture capital firm has closed its fifth fund, raising $100 million that it will use to invest in 15-to-20 early stage B2B startups across Washington, Oregon, and Western Canada. It has already made five new investments as part of the fund.
“Our focus on this region is pretty intense,” said Voyager managing director Bill McAleer, who co-founded the firm in 1997. “There’s been an explosion of growth, particularly in Seattle.”
McAleer noted the increase in cloud and AI-related talent driven by hometown giants Amazon and Microsoft, as well as Silicon Valley companies such as Facebook and Google that have built huge engineering centers in the region.
Voyager is also spending more time in Vancouver and other parts of Canada. The firm sees opportunity there with a bevy of B2B startups and a lack of investment dollars, along with strong public-private partnerships, said Diane Fraiman, a Voyager managing director based in Portland. Voyager also last year hired Meredith Powell as its dedicated Canadian venture partner.
At the same time, Voyager is no longer investing in California companies. When the firm analyzed results from its third and fourth funds, “it was totally clear that we outperformed in the Pacific Northwest over California,” Fraiman said.
“The valuations are getting really crazy down there,” McAleer added. “It costs almost 2.5 times as much to build a company.”
Voyager’s focus on Portland will continue. Fraiman said she’s seeing a lot of talent and new founders coming out of larger successful startups such as Puppet, Jama, New Relic, and others.
Voyager raised its fifth fund from family offices, foundations, trusts, fund of funds, and individuals across the globe. Many want “diversification out of the Bay Area,” Fraiman said.
“They saw the Pacific Northwest as not only hot in technology, but this [early stage] being somewhat insulated from the bust or boom mentality,” she said.
Voyager’s exits include Bluebox; Elemental Technologies; Make.TV; Skyward; and others. Current portfolio companies include Act-On; Lighter Capital; Lytics; Zipwhip; and more.
The 13-person Voyager team includes Erik Benson, managing director who joined the firm in 1998; James Newell, managing director who joined in 2017 after relocating from Silicon Valley; and Bruce Chizen, the former Adobe CEO who is venture partner.