Quebec’s Mila Institute raises $100 million for AI startups

The Mila artificial intelligence The Quebec institute is raising a US$100 million venture capital fund and plans to invest in more than 55 early-stage AI companies, in partnership with Inovia Capital in Montreal, as the federal government-backed research center places greater emphasis on helping scientists create companies.

The Venture Scientist Fund, as it will be called, has not yet closed its doors. But Mila Ventures managing director Stéphane Marceau said there was strong interest from potential investors. “We have received a huge amount of product from Canada and the United States,” he said.

The fund will target pre-seed AI companies based on emerging research not only from Mila, but from Canada’s broader ecosystem, including universities.

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Competition for top AI talent is fierce, and the Venture Scientist Fund’s goal is to help retain talent and intellectual property in Canada. “Researchers basically told us, ‘We need support from our institutions. We need access to capital,'” Marceau said.

A serial entrepreneur and angel investor, Mr. Marceau joined Mila last year to run its venture capital arm, which offers programs to help commercialize research. He has witnessed the influence the United States can have on Canadian AI experts.

“They publish a newspaper, they go to the United States and come back with a big check,” he said. “We need to be very active on the ground and part of the conversation. »

Although Canadian researchers have played a considerable role in fundamental breakthroughs in AI (there are few Canadian AI conferences that do not praise Geoffrey Hinton, Yoshua Bengio and Richard Sutton), the economic impact has largely benefited American companies like Google and OpenAI. The country is home to about 10 percent of the world’s top AI research talent, but the capital deployed by Canadian funds in 2024 represented less than 2 percent of global venture capital investments in AI, according to Mila.

A study last year by venture capital firm Leaders Fund found that only 32.4 percent of “high potential” startups led by Canadians launched in 2024 were headquartered in the country.

The federal government is preparing a new national AI strategy to be released later this year. Commercializing local AI research more effectively is one of the plan’s priorities.

Mila, along with Toronto’s Vector Institute and the Alberta Machine Intelligence Institute, have the advantage of being close to the type of fundamental AI research that can be used for new commercial products and services. A recent survey of the broader Mila community also found that nearly 95 percent of respondents were interested in entrepreneurship. “It’s a myth that researchers just want to do research,” said Marceau.

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 about bridging the gap between research and commercialization,” said Chris Arsenault, co-founder and partner of Inovia.

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Although Canada is home to a number of funds that invest in AI companies, the country does not have one that focuses exclusively on pre-seed and native AI startups. “It’s not about integrating AI into an existing product,” he said.

Inovia will not manage the fund, but is helping Mila build a small management team.

Mila has spawned businesses in the past. Dr. Bengio, former chief scientific officer of Mila, co-founded Element AI, which was acquired by California-based ServiceNow Inc. NOW-N in 2020. Drug discovery startup Valence was acquired by Utah-based Recursion Pharmaceuticals Inc. in 2023.

More recently, Polaire, the AI-powered citizen engagement platform, and automation company Rise Robotics were born in Mila.