The AI-Native Gatekeepers: Inovia's New Fund and the Risk of Exclusion
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With a $325-million USD target for Fund VI, Inovia Capital is betting big on 'AI-native' startups, but the firm's reliance on a closed circle of LPs and traditional partner structures raises questions about who actually gets a seat at the table.
OPINION: Inovia Capital recently announced a $200-million USD first close for its sixth early-stage venture capital fund, according to BetaKit. While the firm is framing this as a bold leap into the future, the mechanics of the fund suggest a familiar pattern of venture capital: a closed-door club that prioritizes established relationships over genuine disruption.
Inovia partner Karamdeep Nijjar told BetaKit that Fund VI is the firm's first "completely AI-native fund," targeting startups that utilize AI from day one to "change the world." The scope is broad, covering frontier technologies such as robotics, quantum, compute, energy, developer operations, infrastructure, and cybersecurity. However, the definition of who is "native" enough to qualify is left to the discretion of six partners: Nijjar, Magaly Charbonneau, Shawn Abbott, Kory Jeffrey, Taha Mubashir, and Steve Woods.
When we look at who is funding this vision, the list reads like a directory of the Canadian establishment. BetaKit reports that the first close was supported by returning limited partners (LPs) including the Business Development Bank of Canada, Investissement Québec, La Caisse de dépôt et placement du Québec, Fondaction, Fonds de solidarité FTQ, Teralys Capital, and the Canadian Imperial Bank of Commerce. Nijjar himself credited the firm's ability to raise capital in a difficult market to the trust built with these LPs over many years.
While trust is a virtue in finance, in the world of access and inclusion, it is often a euphemism for the status quo. When a fund relies on the same circle of institutional LPs to fuel its growth, the pressure to maintain "top-quartile performance"—which Nijjar claims the fifth fund achieved via investments in companies like Spellbook, Gaia, Flare, and Cohere—often leads to safe bets. It leads to investing in founders who speak the same language as the partners and the LPs, rather than those breaking the mold.
The firm plans to deploy Fund VI through 15 to 20 primary investments in startups ranging from seed to Series A stages across Europe and North America. To identify these opportunities, Inovia is utilizing its fund-of-funds initiative known as the Discovery Program for emerging managers. BetaKit notes that Inovia is currently building a new version of this platform in partnership with Northleaf Capital Partners, though Nijjar declined to provide further details on those plans.
Between the $325-million USD target for Fund VI, the $450-million USD growth equity fund (of which $365 million USD has been raised), and a $100-million USD Venture Scientist Fund co-launched with the Québec AI research institute Mila, Inovia has amassed $2.7 billion USD in total assets under management.
But as the capital piles up, the question remains: is this "AI-native" shift actually opening doors, or is it just building a more sophisticated fence? If the path to funding is paved by the same institutional LPs and overseen by the same partner circle, the founders who don't fit the traditional VC mold will likely find themselves on the outside looking in, regardless of how "native" their AI is.