Ontario Teachers’ Pension Plan partners with BCG on new incubator
The Ontario Teachers’ Pension Plan (OTPP) has partnered with BCG Digital Ventures to launch a new venture incubator, Koru, tasked with building “novel ideas” with the companies in its portfolio.
Koru is wholly owned by OTPP and created in partnership with BCG Digital Ventures (DV), the global corporate investment and startup incubation arm of Boston Consulting Group. DV has seven centres across the US, UK, Germany, Australia, China, and Japan.
OTTP has a lot of money to work with, overseeing $201.4 billion in net assets as of June 30, 2019. The fund has major investments in dozens of private companies, as well as majority ownership stakes in numerous office towers and major shopping centres. Perhaps most famously, the OTPP used to own approximately 80% of Maple Leaf Sports & Entertainment, which it sold to Bell and Rogers for $1.32 billion in 2012.
Some of the companies in which the OTPP has invested more than $150 million include 24 Hour Fitness, insurance broker BroadStreet Partners, waste manager GFL Environmental, Plano Molding Company, and Shearer’s Foods.
With digital disruption shifting the business environment on its head, the OTPP has understandably decided to try to strengthen its portfolio companies with the incubation of novel digital products and services. Koru, which is based in Toronto, will help those companies create, test, and build scalable new digital business. The incubator is currently planning to hire 35 entrepreneurs, engineers, product managers, designers, and startup operators.
"Koru is a clear demonstration of Ontario Teachers' partnership model of investing. It provides us with an entirely new way to work alongside our portfolio companies and help protect them against disruption by finding opportunities to add significant mutual value along the way," said Ziad Hindo, chief investment officer, OTTP.
Koru has already designed its first venture in collaboration with portfolio company Amica Senior Lifestyles. The venture, “Elovee,” is an advanced conversation software which digitizes the voice and likeness of family members to help comfort dementia sufferers when loved ones cannot be physically present.
The incubator has three ventures currently in the pipeline, and plans to launch four more in 2020.
Bryan Marcovici will oversee Koru as general manager and managing partner. Marcovici joins from BCG Digital Ventures, where he was venture architect director.
"We are pleased to have Bryan on board, with his expertise including the industry know-how he has built during his time at BCG Digital Ventures," added Hindo.
OTTP’s move into tech ventures follows similar moves by large Canadian pension plans. La Caisse, Quebec’s largest pension plan fund, announced earlier this summer that it would invest up to $2 billion in companies with innovative business models and disruptive technologies. Late last year, The Canada Pension Plan Investment Board said it was planning to invest up to $1 billion in venture capital funds.
