In this episode of the EUVC podcast, Andreas talks with Avid Larizadeh Duggan, Senior Managing Director (EMEA) at Teachers' Venture Growth (TVG), the venture arm of Ontario Teachers' Pension Plan (OTPP), headquartered in Toronto.

TVG has €5.4B in assets under management, backing innovative companies like Canva, Databricks, DeepL, and SpaceX. Avid brings experience from her work leading investments for TVG, with a strong focus on scaling Series B+ technology companies globally.

Together, we will explore the unique perspective OTPP brings as one of the world’s largest pension funds. We will also dive into the challenges and opportunities of scaling global technology companies and the role of late-stage growth investing in driving the next wave of innovation.

Watch it here or add it to your episodes on Apple or Spotify chapters for easy navigation available on the Spotify/Apple episode.

Breaking new ground for VC retreats

Andreas kicks things off with a discussion about a new approach to VC retreats—no more loud tech events and 10-minute convos over house music. Instead, it's all about three days in the mountains, VCs and founders side-by-side, creating genuine relationships. “It's about connecting in a meaningful way for the next 30 years, rather than another cocktail chat,” Andreas shares.

Teachers Venture Growth & OTPP - a short overview

Avid gives us a deep dive into Teachers' Venture Growth (TVG), which is part of the $250CAD billion Ontario Teachers’ Pension Plan. Focused on Series B and beyond, they invest globally in tech, especially in Europe, North America, and India. Notable investments include Alan, Canva, and SpaceX. Avid explains that Teachers’ (as they call themselves internally) invest around 80% directly and 20% through funds, offering a unique lens on how to manage long-term capital.

The unique power of being a pension fund in venture

Andreas and Avid delve into the pros and cons of being a growth stage investor at a pension fund. Avid mentions the absence of pressure to raise capital constantly, the ability to stay in for the long haul, and the tremendous macro-level view they have thanks to being part of a large asset manager. She explains that this unique positioning allows them to make strategic decisions without the constant need to think about fundraising cycles, which ultimately benefits the portfolio companies that need time and steady support to grow.

Avid also talks about the flexibility they have in managing investments. Unlike traditional VCs, they aren't bound by an 8-10 year fund lifecycle, which gives them the freedom to hold onto companies for much longer, ensuring they fully realize their potential. This long-term perspective, she believes, allows them to play a true partnership role with founders, giving them the time needed to grow sustainably.

However, she also highlights that large-scale internal reporting can sometimes be a grind compared to more agile venture funds. Being part of such a large institution means they need to satisfy extensive governance and oversight requirements. Despite this, Avid feels that the trade-off is a small price to pay, given the scale and breadth of resources available to help their portfolio companies succeed.

Leveraging a global asset base

With around a hundred portfolio companies outside of its TVG portfolio spanning infrastructure, real estate, and beyond, TVG offers a unique value proposition to the companies it invests in. Avid describes how they create synergies between Ontario Teachers’ various assets and startups, such as supporting Alan’s expansion efforts.

For Alan, a health insurance and healthcare services company, Avid elaborates on how TVG's support was crucial in supporting their international expansion. Alan’s unique model, which combines health insurance, AI-driven technology, and healthcare service provision, faced hurdles when entering new markets like Canada. TVG leveraged their market knowledge to provide strategic guidance on navigating Canada’s healthcare ecosystem, while helping to build out their local team and successfully launch operations in the country. This comprehensive support allowed Alan to successfully scale its services in Canada, which had not seen a new health insurance provider enter the market since 1957.

The ability to leverage vast resources, synergies across its portfolio, and deep market knowledge are key differentiators that position Ontario Teachers’ as more than just a capital provider—it becomes a strategic partner that can facilitate market entry and expansion on a scale that traditional venture funds may struggle to match.

Growth stage opportunities in Europe

Avid discusses the exciting potential of scaling in Europe, acknowledging that while each country presents its own unique set of regulations, cultures, and customer preferences, this diversity also represents a vibrant and dynamic market landscape. The diversity across Europe fosters resilience, and companies that succeed here are well-positioned to scale globally due to the robust foundations built in navigating multiple regulatory and cultural landscapes.

Avid is particularly optimistic about Europe’s strengths. The manufacturing sector, for example, is embracing digital transformation at an accelerating pace, with Industry 4.0 innovations driving substantial productivity gains. This presents a unique opportunity for European manufacturers to lead the global market in advanced, digitally integrated production techniques. Avid believes that European manufacturing is at an inflection point, with the adoption of artificial intelligence having tremendous potential for the industry.

Another major opportunity is the focus on sustainability and green tech in Europe. Governments are proactively supporting green initiatives, which creates a fertile environment for startups and growth-stage companies working in renewable energy, sustainable manufacturing, and carbon reduction technologies. European companies in these sectors are positioned not just to succeed financially but also to lead in addressing some of the most pressing challenges of our time.

Avid also addresses the talent landscape, which has been a traditional bottleneck, particularly for scaling to hundreds of millions in revenue. However, she notes significant improvements as the European ecosystem continues to mature. More experienced operators are emerging from successful European startups, creating a growing talent pool that is well-versed in scaling businesses. Avid is confident that the talent ecosystem in Europe will continue to strengthen, ultimately making it easier for growth-stage companies to scale effectively across the continent and beyond.

Investing in industry 4.0 & the journey into deep tech

Avid and Andreas explore how Ontario Teachers’ is making big moves in Industry 4.0. Avid notes that manufacturing is the largest single sector in the European economy, yet it has one of the lowest adoption rates of digital technologies. The goal is not to replace existing workflows but to bring in data-driven technology that complements existing processes without disrupting 20-year CapEx cycles.

Reflecting, Avid says she's still on the journey of understanding deep tech and hardware—and is lucky to be working with people with huge knowledge of the field. She underscores the importance of surrounding herself with people who have deep expertise, allowing Ontario Teachers’ to pivot and adapt to the changing landscape.

Avid emphasizes that the shift to Industry 4.0 is a necessity, not just an opportunity. She points out that adopting technologies in manufacturing is key to ensuring European competitiveness on a global scale. By retrofitting existing manufacturing systems with smart technology rather than completely overhauling them, Ontario Teachers’ aims to drive efficiency without imposing impractical costs on companies. This careful, strategic approach is what sets them apart, blending a long-term vision with practical, incremental advances that can be immediately adopted by their portfolio companies.

The organizational flexibility at Ontario Teachers’ also means they can seamlessly combine their vast experience in traditional sectors—like infrastructure and utilities—with the forward-thinking needed for tech investments. This synergy, Avid believes, is crucial to staying ahead in an increasingly interconnected industrial landscape. She is determined to leverage Ontario Teachers' strengths to transform traditional manufacturing and infrastructure by integrating advanced digital solutions, ensuring their investments not only grow financially but also contribute to broader industry progress.

Advice for founders choosing investors

“Pick an individual, not a brand,” Avid advises founders when choosing investors. The most important thing? Finding someone you can comfortably share bad news with, because not everything will go smoothly. She also highlights the importance of building a diverse board—people with different experiences, not just copies of the same profile—and making sure the individuals around the table are compatible.

Debt financing at growth stage

Debt is a useful tool, but only if a company has control over its revenue and expenses, says Avid. Sheunderscores that debt can quickly become a dangerous liability if used improperly, especially in times of financial instability. She encourages founders to be strategic, emphasizing that debt is most effective when used for initiatives that generate clear, measurable returns, such as acquisitions that expand capabilities or market reach.

Avid stresses that founders must have a solid understanding of their cash flow dynamics before taking on debt. This means having predictable revenue streams and a clear pathway to profitability, allowing debt to serve as a growth catalyst rather than a financial anchor. She points out that using debt to avoid down rounds or mask fundamental business issues can lead to long-term harm, including restrictive covenants and increased financial stress that might hinder operational flexibility.

Culture as the differentiator

In the closing remarks, Avid emphasizes that culture is the most significant differentiator for any organization—whether it’s a startup, a pension plan, or a VC firm. “People can copy your product, your strategy, but they can’t copy your culture,” Avid states, leaving us with a powerful reminder that the right culture is what really sets successful organizations apart.