John Ruffolo: From Near-Fatal Accident to Launching Maverix Private Equity

John Ruffolo, while not a household name like some investors, holds significant recognition within Canadian business circles. Having previously led the technology, media, and telecommunications practice at Arthur Andersen for many years, he joined OMERS approximately ten years ago following a request from a former colleague who had assumed the role of CEO.

Investing in Canadian Innovation

Ruffolo’s mandate at OMERS was to identify and invest in the most promising Canadian companies. He directed the venture unit towards investments in well-known entities such as Hootsuite, a social media management platform, Wattpad, a storytelling platform recently acquired, and Shopify, a leading e-commerce platform.

The Shopify investment proved particularly noteworthy, as OMERS held around 6% of the company during its 2015 IPO, which valued it at approximately $1.3 billion. However, due to the pension fund’s policies, the stake was gradually sold, despite Shopify’s subsequent substantial increase in value – its current market capitalization stands at $130 billion.

A New Venture and a Life-Altering Accident

After successfully establishing a growth equity unit within OMERS, Ruffolo decided to pursue his own venture. Shortly thereafter, in September of the previous year, he experienced a devastating accident while cycling. While on a 60-mile ride on a country road, he was struck by a Mack truck, resulting in numerous fractures and paralysis from the waist down.

Such a series of setbacks could easily overwhelm an individual. However, after six months of recovery, including multiple surgeries and intensive therapy, Ruffolo is progressing well and aims to cycle again. He has also fully resumed his professional life and is now introducing his new Toronto-based firm, Maverix Private Equity.

Maverix Private Equity: A $500 Million Fund

Maverix Private Equity has secured $500 million in funding to invest in “traditional businesses” that generate at least $100 million in annual revenue. These companies are already leveraging technology for growth but require external investment to accelerate their expansion.

Ruffolo discussed the accident and his new fund in a recent interview. The conversation, available for listening, begins around the seven-minute mark and offers valuable insights. Below are excerpts from that interview, lightly edited for brevity.

Interview Excerpts

TC: How are you feeling, given everything you’ve been through?

JR: To say it’s great to be alive is an understatement. I didn’t fully grasp how close I was to death until about eight days after the accident. I requested my phone to check what was happening, and I was inundated with thousands of messages.

People were sharing news articles, and the first one I saw described my injury as “life-threatening.” The doctors then confirmed that I was, in fact, very close to dying in the initial 48 hours. Medical professionals are still puzzled as to why I survived the impact, which was initially frightening, but I am incredibly grateful to be alive. My recovery is exceeding expectations, and I began regaining feeling in my legs within a couple of weeks.

TC: Considering the severity of your injuries, were you already thinking about your new fund within a month? Could you be described as a workaholic?

JR: Some might call it foolish. [Laughs.] Initially, my primary concern was my family. Fortunately, I have a close group of cycling friends – we call ourselves Les Domestiques – who are investors and CEOs of major Canadian banks. They immediately rallied to support my family and ensure everything ran smoothly.

With my family’s needs addressed, I had time in the hospital and, naturally, became restless. I began contacting investors who had previously committed to the fund before the pandemic. I simply wanted to assure them that I was still capable and ask if they would remain invested once I was discharged.

TC: Is the investment in your leadership and proven track record a key factor?

JR: Absolutely. It’s interesting to compare the approaches of American and Canadian investors. American investors are typically more transactional, quickly investing when they see a strong value proposition. Canada operates differently. Here, relationships are paramount, which has both advantages and disadvantages. Canadian investors tend to be more conservative, but they also demonstrate unwavering loyalty during challenging times.

In my case, every investor who had committed before COVID honored their commitment, and one even doubled their investment, expressing sympathy for my situation. I gladly accepted their support.

TC: Do you believe there’s a demand for a Canadian firm focused on investing in Canadian companies, rather than relying on American capital?

JR: This leads into the fund’s core thesis, which, while established in the U.S., is relatively new in Canada. Leading U.S. firms, such as Insight Partners, Madison Dearborn, Bain Capital, and General Atlantic, don’t have direct equivalents in Canada. We have strong venture capital and buyout private equity firms, but there’s a gap in supporting traditional industry entrepreneurs who are integrating technology into their businesses.

My goal is to establish a Canadian firm that will lead or significantly participate in these deals, helping these businesses scale.

TC: Are you specifically targeting old-line industries rather than growth-stage tech companies?

JR: I define a true technology company as one that develops tools used by other businesses to enhance their growth and efficiency. I’ve invested in such companies for ten years with success, but there’s currently an oversupply of capital in those sectors, particularly in SaaS. Valuations often don’t align with financial realities.

Meanwhile, companies in sectors like financial services, healthcare, and travel are embracing technology but aren’t necessarily “tech entrepreneurs” themselves. We’re not introducing technology; they already have it. For example, a travel company we’re considering needs someone who understands both the travel industry and the impact of technology on global scalability.

The companies we’re targeting typically generate $100 million in revenue with relatively flat EBITDA and haven’t previously sought institutional financing. They’re growing at 20% to 50% annually and aspire to become billion-dollar companies.

TC: What ownership stake are you seeking, and what is the typical check size?

JR: We’re aiming for 20% to 40% ownership, a significant minority stake, and we’re writing checks of $50 to $75 million (U.S.).

TC: Given the limited number of large companies in Canada, aside from Shopify, how do you encourage the companies you work with to think bigger?

JR: Canadians may be perceived as more conservative, but surveys reveal a significant number of Canadians lead major firms in the United States and Silicon Valley. It’s not an inherent trait of Canadians to be risk-averse.

I entered venture capital because I was frustrated by companies building products without generating revenue. We’ve largely solved the zero-to-$10 million problem and the $10 million-to-$100 million challenge in Canada. However, since 2016, I’ve observed companies with $50 million to $70 million in revenue plateauing, primarily due to challenges in global scalability.

In the U.S., companies can achieve billion-dollar valuations by focusing on the domestic market. Canada’s smaller market necessitates global expansion, which many Canadian companies struggle with. My current focus is on bridging that gap – helping companies scale from $100 million to $1 billion-plus.