Where we’re looking to invest in vertical B2B software & AI
Written by Marissa Moore and Taku Murahwi.
Vertical software is naturally an area of intense business transformation, and dramatic, fundamental shifts. To keep on top of what industries and categories present the greatest areas of opportunities, we on the OMERS Ventures vertical software team do a comprehensive, in-depth review to set priorities and targets for each year.
In 2023, we took a macro data-driven, top-down approach to this prioritization exercise and quickly followed up with deep dives on the legal, auto (x2), and dental verticals. This year, we wanted to incorporate a few new criteria, including the opportunity for vertical AI. We recently shared our thoughts on what determines a vertical’s “AI readiness” along with a heatmap of our analysis (sign up here for a copy of the full report — you’re basically getting an entire whitepaper on vertical AI’s sector-by-sector impact for free!).
We also wanted to consider where we stand to both contribute the most, in terms of our collective experience as investors and operators — and, naturally, also where we stand to be in the position to pick the likeliest winners, based on the same .
After taking our new criteria into account, we identified 5 high priority verticals and 9 medium priority verticals for this year. This is where we will be spending most of our time. And these companies represent best-in-breed examples of the types of innovators in our cross-hairs…
Let’s look a little more closely at why the OMERS Ventures team in particular can be a great investment partner in each respective area.
High Priority Verticals
Healthcare
Healthcare has always been a major focus area for OMERS. One underappreciated fact about us is that OMERS (OMERS Ventures’ primary backer) manages the pension benefits of 600k municipal workers — many of them nurses — across the province of Ontario. In addition, several OMERS entities are material investors in healthcare and health technology, including OMERS Private Equity (e.g., Premise Health, Gastro Health, Forefront Dermatology, Paradigm, CBI Health) and OMERS Growth Equity (e.g., Aledade, Evidation, Innovaccer, Carrum Health). And, of course, OMERS Ventures has been an active health tech investor with portfolio companies including League, Birdie, Caraway, Peerwell (acquired by Bardavon) and others. Michael Yang, the Head of OMERS Ventures, has been investing in health tech for 20+ years and has served on the boards of companies including Accolade and Healthline. Before joining OMERS Ventures 2+ years ago, Marissa Moore served as a Managing Analyst on CB Insights’ digital health intelligence team — specializing in telehealth — right at the height of the pandemic. Darrell Etherington was Science and Health Editor at TechCrunch just prior to, and continuing throughout the pandemic — focusing on remote health, point-of-care innovation and more.
Life Sciences
Oxford Properties Group (OMERS’ real estate arm) has a specialized life science business that boasts a substantial footprint of laboratory and biomanufacturing facilities across key life science geographies including Boston, San Francisco, and San Diego. Notable tenants span biotechnology firms like CRISPR Therapeutics, pharmaceutical companies like Pfizer, and research institutions like Scripps. Oxford Life Sciences and OMERS Ventures actively partner to enhance visibility of innovative life science software solutions with key buyers/users and to provide venture/fundraising advice to emerging biotechs. OMERS also has life science exposure through OMERS Life Sciences. Established in 2016, OMERS Life Sciences is one of the largest drug royalty investors in the world, having completed over US $3 billion in transactions since inception. Recent deals include the acquisition of drug royalties and milestones from Xencor for $215M in 2023 and the purchase of a rare disease drug royalty from Ultragenyx for $500M in 2022. OMERS Ventures also has a couple resident life science enthusiasts in the house! Dr. Jamie Blakeman got his Masters in Chemistry and a PhD in microbiology before taking on a job as our Lead Data Engineer. And Marissa Moore spent a combined 7 years studying biotech at Princeton University and Johns Hopkins University.
Financial Services
OMERS Ventures has significant expertise in the fintech sector, as evidenced by our portfolio and the domain knowledge of our team. Our investments span a range of segments in financial services with investments in OneVest (all-in-one wealth platform), Moves Financial (banking designed for gig workers), Flagstone (cash deposit & savings platform), PrimaryBid (expanding fair access to IPOs and public follow-on offerings), and ClearEstate (estate planning). Several members of the OMERS Ventures team come from financial services backgrounds and have deep domain knowledge of the space, including Partner Laura Lenz, Dave Wechsler, and Ryan Zauk. Side note: The fintech team regularly publishes thoughts on the sector, with some recent examples being the future of finance and fintech within the Canadian ecosystem. Before joining OMERS Ventures, Amanda Ashford worked at a fintech startup from day 0 through acquisition. Outside of OMERS Ventures, we have exposure to the financial services vertical through OMERS Growth Equity (investors in Purpose Financial) and OMERS Capital Markets, which is an active participant in the public capital markets.
Freight & Logistics
Freight & logistics has long been a focus area for OMERS broadly. On the Ventures side, we’ve made investments in Container xChange (container logistics and operations platform) and Altana (an AI platform delivering a dynamic, intelligent map of the global supply chain). In addition to this, OMERS Infrastructure has invested in Associated British Ports (ABP), one of the U.K.’s largest ports groups that owns and manages 21 ports across England, Wales, and Scotland and handles approximately 25% of the U.K.’s seaborne trade by volume. Oxford Properties (OMERS’ real estate arm) also boasts a comprehensive industrial and logistics portfolio, featuring top-tier warehouses, manufacturing, and distribution facilities. This includes joint ownership of IDI Logistics, a leading player in logistics real estate investment and development.
Retail
Oxford Properties (OMERS’ real estate arm) boasts 10 million square feet of premier retail properties across North America and Europe, including some of the largest malls in Canada. Inmar Intelligence — an OMERS Private Equity company — provides incentive & loyalty, media, and product lifecycle solutions to over 90% of CPGs in the US, 40K+ retailer locations, and all top 25 grocers. OMERS Infrastructure has exposure to the space through Tank & Rast, a leading operator of gas stations & convenience stores along the German Autobahn. OMERS Ventures’ portfolio company Solink is an industry-changing video security system, offering brick-and-mortar retailers like Lululemon and The Gap a smart way to manage operations, security, and loss prevention. Quorso, another OMERS Ventures portfolio company, is globally recognized as a leading productivity platform for retail store management and boasts clients like Dollar General, Tractor Supply, and Petsmart. OMERS Ventures has made several investments adjacent to retail as well, including Shopify and Bold Commerce. Finally, we have several retail/ecommerce experts on the OMERS Ventures team, including Darrell Etherington, who worked in product marketing at Shopify and then later covered retail POS during his time at TechCrunch, and Casey Rovinelli, who spent 7 years at eBay where he was an early member of the eBay.ca launch team.
Medium Priority Verticals
Aerospace & Defense
OMERS Private Equity’s Trescal is a global provider of specialty calibration services to the aviation and defense industries and, adjacently related, OMERS Growth Equity is an investor in Porter Airlines. On the OMERS Ventures side, Darrell Etherington draws from his experience covering A&D at TechCrunch as Space and Defense Editor, and Managing Partner Henry Gladwyn draws from his military reserves background. Some of our portfolio companies also work with the U.S. DoD.
Accounting, Tax, & Payroll Services
OMERS Ventures’ very first investment was in Wave, which was acquired by H&R Block in 2019. We’re also investors in Fonoa, a fast-growing leader in sales tax compliance with customers including Uber, Netflix, Zoom, and Intuit. Adjacent to payroll, OMERS Ventures’ Partner Laura Lenz also draws upon her experience as a lead investor in Varicent, which ultimately sold to IBM and then spun-out to Great Hill Partners and Spectrum Equity. We also have former bookkeepers and accountants on the team!
Architecture, Engineering, & Construction
Oxford Properties (OMERS’ real estate arm) manages ~$84B of assets across four continents and is one of the most active developers in the world, often with 100+ construction projects underway at the same time. OMERS Ventures and OMERS Private Equity also have experience in the architecture, engineering, and construction arena through investments in Resi (UK’s #1 architecture firm) and Knight Commercial (a commercial provider of restoration, construction, and roofing services in the US). OMERS Ventures’ Jennifer Jansen previously owned and ran a PR agency servicing companies in this industry, with long term clients such as global engineering firm ABB and engineering firm Sandvik. OMERS Ventures’ Justin Ouyang started his tech career with a stint at Bluebeam Software and has been passionate about the AEC space ever since! We also have members of the team who have worked in on-site construction and who have served on municipal boards overseeing standards for development.
Auto & Consumer Transportation
OMERS Ventures has made a handful of investments in this vertical, including Waabi (autonomous trucking technology), Acerta (automotive manufacturing quality analytics), and BusBud (booking platform for bus & train tickets). Michael Yang, the Head of OMERS Ventures, also ran Yahoo! Autos and invested in online auto businesses before joining OMERS Ventures. We have extensively researched this sector, publishing insights on Autotech trends and the current state of dealerships. OMERS Capital Solutions group are investors in AGP, which is one of the world’s leading glazing manufacturers that works with over 20 automotive brands. OMERS Private Equity also has exposure to this vertical through Caliber Collision, one of the largest collision repair operators in the US, and Trescal, a specialty calibration service provider serving the auto industry. Darrell Etherington was Transportation & Mobility Editor at TechCrunch, and built the vertical from scratch to its current position of authority across the industry.
Food & Beverage Services
OMERS Ventures has several investments in the food & beverage arena, including TouchBistro (restaurant POS), Deliverect (POS <> third-party delivery platform integration), and Solink (industry-changing video security system for QSRs like Tim Horton’s). OMERS Growth Equity is also a co-investor in TouchBistro with us, and OMERS Infrastructure had exposure to the space through Tank & Rast, a leading operator of quick service rest stops along the German Autobahn.
Information Technology
Beyond our lengthy track record investing in software, OMERS Ventures also has experience in quantum computing, optical interconnect, and data centers through our investments in Xanadu and Ranovus. Members from our team draw upon experience working at companies like Pinterest, Slack, Zenefits, Uber, Google, Shopify, and Paypal. Before joining OMERS Ventures, Data & Technology Partner Casey Rovinelli also ran a small agency implementing marketing/product analytics and automation software for venture-backed companies. And the newest member of our team, Ryan Zauk, joins us from Morgan Stanley’s tech team, where he worked with companies like Adobe, Anthropic, Deel, Docusign, and more.
Insurance
OMERS Ventures has been an active investor in insurtech, with investments in Clearcover, Joyn, WeFox, and Foresight. Team member Dave Wechsler, an established industry authority who joined us from Hippo, brings extensive experience. Dave also shares insights through published content and hosts the weekly “Insurtech Rap,” featuring discussions with industry experts, VCs, and special guests. Outside of OMERS Ventures, OMERS Growth Equity is an investor in Ladder Life.
Legal
As a venture firm, we have the distinct pleasure of getting to work with quite an array of lawyers — quite frequently: our in-house counsel, our external counsel, our portfolio companies’ counsel, and our co-investors’ counsel, just to name a few. We also have some former lawyers on the investment team, including Managing Partner Henry Gladwyn. As a group, we’ve been building our knowledge base and network in this vertical and sharing our thoughts through deep dive posts like this one from last year. Outside of Ventures, OMERS has a couple different bets on the legal vertical including Clio through OMERS Growth Equity and Epiq through OMERS Private Equity.
Media & Entertainment
OMERS Ventures has experience in the media & entertainment space through both our portfolio companies and our people. We’re investors in both Felix & Paul Studios, an EMMY Award-winning creator of immersive entertainment experiences, and Medal.tv, the largest platform for short-form gaming video. And several of our team members come from media backgrounds, including Darrell Etherington, who served as the Managing Editor at TechCrunch, and prior to that spent the majority of his career as a reporter for the publication. He was also editor of consumer and remote work tech at GigaOM, the founding senior writer at BetaKit, and his work has appeared in The Washington Post, The National Post, The New York Times and more. Michael Yang, the Head of OMERS Ventures, has been a long-time investor in media and previously led a $125M business unit in Yahoo! Media Group. Partner Eugene Lee spent several years at Yahoo and as the VP of Business at High Gear Media (acquired by Internet Brands). Casey Rovinelli, OMERS Ventures’ Data & Technology Partner, was a media buyer in a past life and also produced trade shows and video content in prior roles. Ryan Zauk, along with a couple friends, started his own independent record label called Sunpop.
If you’re developing B2B software purpose-built for any of the industries listed above, we’d love to chat! OMERS Ventures makes investments in North America-based tech startups from Series A to Series C, with first checks ranging in size from US$5–25M. If these parameters apply to you, don’t hesitate to reach out to us at mmoore@omersventures.com and tmurahwi@omersventures.com.
