Two of Canada’s top universities are looking to turn more classroom projects into billion-dollar businesses.
What happened: The University of Toronto and McMaster University will be the anchor investors in a new $40 million fund primarily backing life sciences startups spun out of the two schools. It's the first time either university has invested in a VC fund.
The focus will be on companies building medical devices and drugs for treating cancer, as well as heart and brain diseases. U of T’s president says the school may also back other VC funds investing in startups outside of the life science sector.
The new fund, which is also getting $10 million from the Ontario government, will be managed by Toronto-based VC firm Genesys Capital.
Why it matters: Canada’s life science sector excels at research, but when it comes to turning work into commercial products, the industry has struggled. Canada ranks ninth among its global peers in research and talent, but just 17th for its business outputs from that knowledge and technology.
Research universities in Canada make $10 million or less per year from licensing the inventions built on their campuses. South of the border, schools like Harvard, MIT, and Stanford make anywhere between US$60 million and US$95 million a year.
Bottom line: U of T alone is responsible for some of Canada's greatest discoveries, including insulin, the foundations of modern AI, and stem cells. The school has had some recent startup success stories (like Cohere, Xanadu, and Waabi), but with a new emphasis on commercialization, we could see a lot more campus ideas turning into billion-dollar businesses.—LA
