Students walk at the St. George campus of the University of Toronto. U of T will bankroll 20 per cent (up to $8-million) of the Genesys University Seed Fund, while McMaster puts in $5-million.Wa Lone/Reuters
Canadian researchers have long made world-class discoveries only to see the economic benefits accrue abroad. Now, universities here are trying to break that pattern by investing in their campus innovators.
On Wednesday, University of Toronto and McMaster University will announce they are anchoring a new $40-million fund managed by Toronto venture capital firm Genesys Capital that will back life sciences startups – mainly spinouts from both schools. It adds to several recent efforts by Canadian universities to help academics become entrepreneurs.
U of T will bankroll 20 per cent (up to $8-million) of the Genesys University Seed Fund, while McMaster puts in $5-million. The Ontario government is contributing up to $10-million through its Venture Ontario arm, part of a provincial strategy to build its life sciences sector. The Temerty family – the main benefactor of U of T’s medical school – and Royal Bank of Canada are also investing. Genesys has already raised more than half the target. The fund will back companies focused on medical devices and drugs targeting cancer and heart and brain ailments.
It is the first time U of T or McMaster has backed a venture capital fund, their respective presidents, Melanie Woodin and Susan Tighe, said in interviews. Both schools, which support their spinoffs with incubators and modest in-house funding, are financing their stakes with revenues from their technology transfer offices, which license patents generated by their academics for commercial use.
Neuroscientist Melanie Woodin became the University of Toronto’s 17th president and the first woman to hold the job.Sammy Kogan/The Globe and Mail
U of T may also back other funds to finance a range of spinoffs after several tech startups founded by its students and professors attracted global notice, including Xanadu Quantum Technologies, Cohere and Waabi Innovation, Ms. Woodin said.
“We generate a lot of intellectual property. We want that to benefit Canadians in terms of financial success” and health and societal impact, more than has been the case, she said. “That’s what we’re trying to turn around.”
Ms. Tighe said the schools aim to advance discoveries to “have real-world impact. This fund is about strengthening that mission.”
The Genesys fund builds on two trends: Few Canadian institutional investors invest in domestic life sciences venture capital, and those VC funds that they back outperform their software and clean technology peers. But that is starting to change.
The Weston Family’s Wittington Innovation Fund began backing life sciences startups last year. The Terry Fox Foundation and Canadian Cancer Agency agreed to anchor a new fund managed by Toronto’s Lumira Ventures to back cancer therapy developers.
Sector advocates argue far more domestic capital is needed. The Genesys fund, inspired by similar efforts anchored by Massachusetts Institute of Technology and University of California, Berkeley, among others, represents “a big signal from the universities and the Ontario government of the importance of this work and its long-term potential for our economy,” Genesys managing director Kelly Holman said.
The Genesys fund is also the latest in a slew of funds anchored by universities to back homegrown innovations. University of Calgary launched seven donor-backed seed funds this decade, including three in life sciences, to finance its spinouts. McGill University donors support an innovation fund that gives modest awards to its researcher-entrepreneurs.
University of Waterloo’s endowment fund in 2025 anchored a venture capital fund spun out of its Velocity incubator to back local startups. And this year, the B.C. government’s InBC Investment Corp. launched two funds to finance spinouts from University of British Columbia and Simon Fraser University. The schools are investing $10-million and $7.5-million in their respective funds, matched by InBC.
These funds aim to redress a humbling reality: while Canadians researchers made such breakthrough discoveries as insulin, stem cells, how the GLP-1 hormone works and foundational techniques in AI, they were mostly commercialized elsewhere. Canada’s research-intensive universities, including U of T, and McMaster, each typically generate $10-million or less in annual licensing revenue from campus inventions – a pittance compared with U.S. peers MIT (US$60.9-million in 2025), Stanford University (US$87-million) and Harvard University (an average US$95.5-million over five years). No Canadian institution made the National Academy of Inventors’ 2025 list of top 100 worldwide universities granted U.S. utility patents.
U of T has tried for decades to help bring homegrown innovations to market since selling its vaccine production business Connaught Labs in 1972. The university, Canada’s largest and one of its top-funded medical research institutions, was the driving force behind the Genesys fund. Ms. Woodin said the idea was influenced by U of T founders who “identified this lack of early-stage seed funding as the critical gap,” she said. “They were looking to us to try and help.”
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The university set out to partner with a Canadian life sciences fund manager that had a strong track record. That led it to Genesys, which booked big returns when two drug companies it launched – Inversago Parma and Fusion Pharmaceuticals – sold for 10-figure sums in 2023 and 2024, respectively. Mr. Holman said the opportunity to partner with U of T “was too good to pass up” and complemented his firm’s core strategy. Like a typical VC fund, Genesys will get a 2-per-cent annual management fee and 20 per cent of realized gains. It now invests out of a $150-million core fund, which will co-invest on some of the university fund deals.
Through its connections to McMaster (where Fusion is based), Genesys helped bring the Hamilton university into the fold, which U of T welcomed. “We thought, the more the merrier, the more diverse the deal flow we have,” said Mr. Holman, who added the fund will also consider investment opportunities outside the two schools.
Editor’s note: An earlier version of this story said the Temerty Foundation is investing in the $40-million life-sciences fund. The Temerty family is investing, but not through its foundation.