Northside Ventures Raises $30M Fund II for Pre-Seed Bets

TL;DR

Northside Ventures, the Toronto pre-seed firm Alex McIsaac founded in 2023, is raising a $30 million USD second fund and has pulled in $17 million USD across two closes toward that target, with a final close expected by early 2027. The new fund more than doubles Fund I's $11 million USD and pushes Northside toward what McIsaac calls an institutional angel investor model: faster decisions and smaller checks than a typical growth fund, but with the sourcing infrastructure of a much bigger shop. Fresh LPs CIBC Innovation Banking and TD Innovation Partners join returning anchor Intact Private Capital and existing backer Bain Capital Ventures, and the fund's focus has shifted from broad early-stage SaaS toward AI infrastructure, robotics, and defense tech.

Key Takeaways

The step-up is real, not just a bigger headline number. Fund I closed at $11 million USD; Fund II is targeting $30 million USD, nearly triple. Average first checks are growing too, from $225,000 in Fund I to $500,000 in Fund II, and follow-on reserves are doubling to 20 percent of the fund. That's a firm scaling conviction alongside capital, not just inflating the raise for optics.

Bank-affiliated capital is underwriting pre-seed risk it normally skips. CIBC Innovation Banking and TD Innovation Partners, both arms of major Canadian banks, are new LPs in a fund that writes checks at company inception. Banks typically show up once a startup has revenue and a venture debt facility makes sense. Seeing them as equity backers this early in the Canadian stack is worth watching.

The thesis has narrowed from general SaaS toward deep tech and defense. Fund I covered AI, B2B SaaS, fintech, and cleantech broadly. Fund II sharpens that into AI applications and infrastructure, robotics, and defense, which McIsaac flags as the fastest-growing category in the current portfolio. It's part of a wider rotation happening across North American early-stage investing this year.

A solo GP is building sourcing infrastructure meant for a bigger fund. McIsaac remains Northside's only general partner, but the team now runs two analysts, two engineers who maintain an internal AI sourcing tool, and a nine-person university scout program feeding deal flow. For a $30 million fund, that's an unusually built-out sourcing machine, and it signals Northside is trying to win on deal flow rather than check size.

Fund Overview

Fund Name: Northside Ventures Fund II
Fund Size: $30 million USD target (about $40 million CAD); $17 million USD raised across two closes as of November 2026
Stage: Pre-seed, generally at or near company inception
Check Size: Averaging $500,000 USD for first checks, up from $225,000 in Fund I
Geography: Canada and the US; Fund I's portfolio split roughly 50/50 between the two
Focus: AI applications and infrastructure, robotics, and defense tech
Key LPs: CIBC Innovation Banking (new, co-anchor), Intact Private Capital (returning, co-anchor), TD Innovation Partners (new), Bain Capital Ventures (existing), plus undisclosed family offices, high-net-worth individuals, and Canadian tech entrepreneurs

Why This Fund Matters

Canada's pre-seed market has long been thinner than the US equivalent relative to the size of its tech sector, and McIsaac has made that gap his entire pitch since launching Northside in 2023. What's changed by Fund II is who agrees with him enough to write a check. CIBC Innovation Banking and TD Innovation Partners aren't typical pre-seed LPs. They're the innovation-banking arms of two of Canada's biggest financial institutions, and their presence here suggests that the big banks see enough deal flow coming out of Canadian pre-seed to want a direct equity stake in who's picking the winners, not just a lending relationship once those winners have revenue.

The pivot toward AI infrastructure, robotics, and defense also tracks with where capital is actually moving right now, not where it was moving when Northside launched in 2023. Defense-adjacent venture investing has gone from a niche, almost taboo category in Canadian tech to one fund managers now name as their fastest grower without much hesitation. Northside backing companies like Vernius Systems and Space (the name, not the category, per the firm's own portfolio list) alongside more conventional AI plays suggests McIsaac is positioning the fund across both the obvious AI wave and the less obvious hard-tech one.

The check-size increase matters structurally too. A jump from $225,000 to $500,000 average first checks isn't just "more money per deal." It changes what ownership percentage Northside can credibly ask for, how much signaling power a Northside check carries to a subsequent round, and how many deals the fund can realistically do before the capital runs out. Targeting 40 companies with a $30 million fund at an average entry check of $500,000 already accounts for $20 million before any follow-on reserve is touched, which puts real pressure on the fund to be right more often than Fund I needed to be.

None of this guarantees outcomes. Pre-seed is still the stage with the highest mortality rate in venture, and a fund built around speed and volume lives or dies on its hit rate in the long tail. But the LP list here is a genuine signal about how Canadian institutional capital is choosing to get exposure to the earliest stage of its own tech ecosystem, and that's a more interesting story than the fund size on its own.

The Team

Alex McIsaac is Northside's founder and sole general partner. Before launching the firm in 2023, he led the Canadian practice at Global Founders Capital, the Berlin-based multi-stage VC firm co-founded by Rocket Internet's Oliver Samwer, giving him roughly a decade of operating and investing experience in Canadian tech before going solo. Naomi Walch is joining the investment team full-time as Fund II ramps up, adding a second dedicated investor to a team that otherwise runs two analysts and two engineers maintaining Northside's internal AI-assisted sourcing tool. A nine-person scout program, largely drawing from university networks, rounds out the deal-flow apparatus. McIsaac remains the only named general partner; there is no indication in the public record of any GP departures or additions beyond Walch's move into a full-time investment role.

Early Portfolio

Fund I backed 30 companies over roughly three years. Nine have gone on to raise priced rounds at higher valuations, and 12 raised additional capital via SAFEs, a reasonable progression rate for a pre-seed book this size. Named successes from that cohort include Canada Rocket Company, Datacurve, North Vector Dynamics, Solcoa Industries, and Terminal. Fund II has already made roughly a dozen investments since the start of 2026, including Aron AI, PolarGrid, Solderable, Space, Vernius Systems, and Windkey, giving an early read on where the fund's new AI-infrastructure and robotics focus is actually landing capital.

What This Means for Founders

For Canadian founders building AI infrastructure, robotics, or defense-adjacent technology at the pre-seed stage, Northside is now writing larger first checks than it was a year ago, which changes the calculus on how much dilution a founder takes on to get that initial institutional backer. McIsaac's pitch of being an "institutional angel investor" is also a signal about speed: founders who need a fast yes-or-no more than they need a board seat and heavy hands-on involvement are the better fit here than founders looking for a lead investor who will run point on the next three rounds.

The firm's sourcing machine (the scout network, the AI tool, the weekly screening volume) means founders outside the usual Toronto and Waterloo pipelines have a real shot at getting seen, provided they're building in one of the fund's current priority areas. Founders in sectors Fund II has deprioritized, like general B2B SaaS without an AI or infrastructure angle, may find less appetite here than they would have found from Fund I.

Fund Momentum Take

The most interesting thing about this raise isn't the $30 million target. It's that two bank-owned innovation arms decided pre-seed equity exposure was worth the risk this cycle, in a market where plenty of larger, more established Canadian funds have struggled to hit their own targets. That's either a sign that Canadian pre-seed is genuinely under-capitalized relative to deal quality, as McIsaac argues, or a sign that strategic LPs are chasing deal-flow visibility into their own future lending pipeline rather than pure financial return. Probably some of both.

The risk worth naming plainly: a solo-GP fund scaling its check size and reserve ratio simultaneously while also expanding into categories (defense, robotics) that typically require more technical diligence than software-only pre-seed investing is taking on real execution risk. McIsaac is betting that his sourcing infrastructure substitutes for additional investment partners. Fund I's progression numbers (nine priced-up rounds out of 30) are solid but not spectacular, and Fund II will need a higher hit rate on bigger checks to justify the step-up to LPs when it's time to raise Fund III.

Our bet: this is a fund worth tracking specifically for how it performs in robotics and defense, categories where Northside has less of a track record than it does in AI and SaaS. If those bets land, McIsaac has a credible case for becoming one of Canada's go-to pre-seed names in hard tech. If they don't, the fund still has a reasonable AI and infrastructure book to fall back on.

Frequently Asked Questions

How much has Northside Ventures raised for Fund II so far?
$17 million USD across two closes, toward a $30 million USD target, as of November 2026.

When does Northside expect to close Fund II?
Early 2027, according to general partner Alex McIsaac.

What stage and geography does Northside Ventures invest in?
Pre-seed, generally at or near company inception, across Canada and the US.

Who are Northside's lead LPs in Fund II?
CIBC Innovation Banking and Intact Private Capital are co-anchoring the fund, with TD Innovation Partners as a new LP and Bain Capital Ventures returning from Fund I.

How big were Northside's first checks in Fund I versus Fund II?
Fund I averaged around $225,000 USD per first check. Fund II is averaging about $500,000 USD.

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