The Vancouverite connects Varshney Capital's investments to industry trends
For over three decades, serial entrepreneur Praveen Varshney has been closely observing the local business scene. He spent five years at KPMG after graduating from Sauder and then went on to start a handful of companies in B.C. with his family. He did that for 14 years, with Varshney’s first venture turning into a multibillion-dollar diamond mine. “I was like, Whoa this beats accounting, this is fun!” he says with a laugh.
At the time he wasn’t too familiar with the idea of “impact investing.” But some exits and success stories later, Varshney Capital Corp. evolved into a family office focused on managing the capital generated by the companies that Varshney and his family had founded. He didn’t intend for it to be anything more, but the Vancouver-based direct equity investor quickly became a “go-to shop for impact entrepreneurs to not just get capital but strategic advice, guidance and more.”
Varshney, who serves as director, still remembers the company’s first outside project as a family office—Carmanah Technologies—because it was able to help the Victoria-based solar systems manufacturer scale from a startup to $75 million in revenue over five years.
“It was basically a 10x return,” he recalls. “And it really opened up my eyes about where to spend time because it was the accidental, serendipitous start to social impact ESG investing before it was even a word or a thing.”
Becoming a parent was a major driver behind Varshney’s focus on investing in social and environmental causes. With a next generation to worry about, he thought, “if you can do good and make money, that's a no brainer.” And in trying to use business as a solution to create sustainable change, he ended up starting impact funds like Humanitas which "returns 354 percent of capital back to investors with exits representing around 49 percent ROI" over three and a half years of investing in smart technologies against climate change.
Impact investing trends
According to Varshney, millennials and Gen Z (including his daughter) are far more concerned about the world than any generation before it.
“They make their decisions—their wallet decisions—by spending money at companies that are not just purely focused on profit,” he maintains. The realization on a global scale means that trillions of dollars are now pooling into impact investment. Varshney is excited to see more people at the party, especially as he sits on the Vancouver Foundation’s board and steers its Impact Investing Committee towards specific causes.
“In terms of trends, there's a lot of focus on cleaner food,” he notes of Varshney Capital’s investments. It simultaneously encourages clean energy and affordable housing by investing in businesses like Victoria-based Pani Energy and Vancouver-based 3H Properties, and also supports industries like electric cars and AI.
“By definition, all business and all investing should be impact because if not, we're in trouble now,” he says. “So hopefully we'll move closer to that direction where it's—using a poker term—table stakes.”