Sep 05, 2015
Canada’s busiest angel group has a knack for picking good startups and even a home run or two
Exact Imaging investor iGan Partners is profiled

In a recent study on angel investing activity in 2014, the National Angel Capital Organization ranked Toronto-based Igan Partners as Canada’s busiest angel group — No. 1 for total capital invested and No. 3 for number of investments.

You’d be forgiven, for not knowing who they are, although they won’t be unknown much longer. Comprised of a group of angels who have been investing together for a decade, Igan Partners is now completing a $50-million raise for a second fund. And at least one of the seven companies in its first fund could become a household name: eSight Corp. produces a high-definition headset that helps the legally blind go back to work, rock-climb, or see their loved ones for the first time.

Igan founder Sam Ifergan is an electrical engineer and has an MBA from McGill. After working at NCR and then Mercer Consulting, he started investing with friends in real estate and technology. He had a gift for startups: of his first four investments, he says, “Two were successful, one did well, and one was a dismal failure.”

The big winner was VisualSonics, which develops advanced ultrasound-image technology. Founded in 1999 by medical physicist Stuart Foster, VisualSonics reached commercialization in 2003 after Ifergan invested $1.5 million. By 2010, the company had 100 employees and was bought by U.S. ultrasound company SonoSite for $75 million.

It was also the year Ifergan and fellow angels Geoff Matus, Michael Stein, Michael Aron formed Igan Partners to formally manage a tech fund of startups. Javier Flores joined later. The terms: they would invest only in digital health and business-to-business software, and in companies where they can make a difference.

Ifergan contends Canada’s “ecosystem for building tech companies is damaged.” Most angels contribute less than $1 million to startups, but that’s not enough to get them to commercialization or regulatory approval, which is where venture capital funds typically get involved. A firm in early-stage limbo “is the type of company we love,” he says. And because of the scant competition, when Igan invests in a startup, “We usually get a good deal.”

The founders pooled $10 million of their own capital and $50 million from outside investors. Half of that came from individuals and family offices outside Canada.

Igan’s first fund now boasts eight companies. The B2B cohort includes numerical search engine Quandl, law-enforcement platform SceneDoc, video-exchange platform Vemba, and fundraising site The health side comprises eSight, biomedical research platform ScienceScape, bacterial-imaging company MolecuLight, and micro-ultrasound pioneer Exact Imaging. Ifergan says most of these companies were pre-revenue when Igan met them, and are all now earning revenue – with several raising additional rounds of capital.

Ifergan says he’s satisfied with the portfolio’s performances so far. Four companies are exceeding expectations, two are meeting them, and two are a little behind. But Igan is patient money. “Because most of the capital is our own, we’re not swinging for the fences,” Ifergan says. “We’re really happy with a double or a triple.”

For a home run, look to eSight. Even the new CEO Brian Mech, who joined eSight in April, thought the company sounded too good to be true. Its headset, which resembles virtual-reality goggles, uses proprietary hardware and image-processing algorithms to create enhanced images for people with what’s called “low vision.” With this aid, new mothers have seen their children for the first time, and wounded veterans can see the faces of their spouses after decades of blurs and shifting shadows. (You can watch these viral videos at Tissues required.)

The company was founded in 2006 by Conrad Lewis, a veteran Ottawa tech executive (Newbridge, Mitel) who wondered if the photons that powered telecom could be adapted to enhance people’s vision. He poured millions into development, but the company was running short of cash before Toronto tech investor Abe Shwartz (Polaris, Cedara) got involved. He invited Igan to the table.

Two years later, Igan has invested $9 million in eSight. “We plowed enough capital in there to re-energize the company and give it the ability to recruit the right talent,” Ifergan says.

With Mech as CEO and Schwartz as chairman, the company launched its first eSight Glasses in May. The problem: the headset and its handheld control unit cost US$15,000, an issue for patients who’ve been underemployed most of their lives. Long-term, eSight expects health plans will cover the costs, especially if it means many low-vision patients can now join the workforce. “This is cheaper than a Seeing Eye dog,” Ifergan says.

So far, eSight has sold mainly through travelling roadshows. If a patient can’t afford the glasses, eSight will help them fund-raise with family and friends. Mech hopes to replace that distribution model with a more scalable one: selling through leading ophthalmologists. When retinal specialists actually see what eSight can do, he says, “The network will build itself.” Other target markets include major employers, school boards and the U.S. Department of Veterans Affairs.

Meanwhile, Ifergan says Igan expects to complete the funding this month of its $50-million Rowanwood Fund II, to create a second cohort of tech stars. “Our pipeline is full,” he says. “You think Silicon Valley is great? Toronto is great, too, and it’s more affordable.”

Rick Spence is a writer, consultant and speaker specializing in entrepreneurship. Email:


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