Nearly 20 years after successfully helping startups build products, Canadian interface design company Metalab launched Metalab Ventures to invest in many of these product-focused startups.
Serial entrepreneur and investor Andrew Wilkinson launched Metalab in 2006, a company that went on to support product innovations from companies including Slack, Coinbase, Uber and Tumblr.
Metalab often works with startups, acting a bit like co-founders, to help them get a product off the ground. Then Metalab “leaves them free” to grow, CEO Luke Des Cotes told TechCrunch. Metalab had a record year in 2023 and participated in the development of 40 products brought to market last year.
Corporate venture capital has found its rise over the past decade as a stable source of capital or when startups have something that big tech wants.
With Metalab Ventures, the venture capital arm will play the role of a long-term value investor, essentially “putting our money where our mouth is,” Des Cotes said.
“We want to go on a journey with them over the next 10 to 12 years,” he said. “The founders have asked us many times when we are going to invest, and sometimes we have, but it has been very ad hoc in the past. Today we are making it a formal process.
Metalab Ventures has raised $15 million in capital commitments for its first fund to invest in product-focused startups, where strategy, design and technology are the key differentiators.
“Product-driven” is how a product will be the company’s differentiator, Des Cotes said. Most businesses have a major element of success that depends on how well a product is created and how well it connects with the user. Metalab Ventures is looking for founders who “believe in the power of design as a tool to connect with users in a different and special way,” he said.
Des Cotes and David Tapp, head of partnerships at Metalab, are general partners of Metalab Ventures and will invest in 25 to 35 startups at the pre-seed, seed and Series A stages. So far, the company has made a handful of unannounced investments, Des Cotes said.
The limited partnership makeup of the new fund includes institutional investors, funds to be funded, angel investors and founders of companies that Metalabs has previously worked with. Metalabs is also an LP of the fund.
The company screens thousands of founders each year to determine who it will help, and that same process has carried over to Metalab Ventures in the way it evaluates investments, Des Cotes said.
The process of determining who to invest in Metalab Ventures includes getting to know the founders and determining whether the company can add value. Metalab often calls on its 160-person workforce to provide leadership in design, technology, products and research.
“We’ve already operated as a venture capital fund,” Des Cotes said. “Now we are working on this process to understand what is the product, what is the opportunity, what is the value that can be created here. When we believe in this sector, we see human capital as our scarce resource which we can then deploy in these companies.
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