The Business Development Bank of Canada’s venture capital arm recently announces its commitment of $10 million to the Atlantic Canada Regional Venture Fund which is being set up to finance start-up companies in the IT, clean energy and healthcare sectors.
This contribution by Canada’s largest institutional venture capital investor brings to approximately $50 million the total amount committed to date by the various partners to the fund, which is now open for business and actively seeking investment candidates throughout the Atlantic Provinces.
“There are many great ideas in the Atlantic Provinces waiting to become great companies”, says Dominique Bélanger, a director in BDC Venture Capital’s Strategic Investments and Initiatives division, who negotiated the deal. “And there are talented and motivated entrepreneurs too. The Fund’s job now is to find the most promising start-ups and support their growth.” The region’s high-tech potential was demonstrated recently by companies like Radian6 and Q1 Labs.
The Atlantic Canada Regional Venture Fund is a privately-managed seed and early stage fund jointly initiated by the governments of Nova Scotia and New Brunswick in November 2010. With its participation, BDC VC joins the governments of Nova Scotia ($15M), New Brunswick ($15M) and Prince Edward Island ($2.5M) as well as privately-owned Technology Venture Corporation ($5M). Fundraising activities will continue following the first closing of the fund in the New Year, which is expected to be between $50- and $60-million.
Selected technology companies will be provided with funding between $1- and $5-million to finance product development and commercialization. The fund is especially welcome given the significant disparity between the Atlantic region and the rest of Canada with regards to the availability of venture capital. Mr. Bélanger adds that “the fund will complement the current active investors in the region, as well as serve as a co-investor of choice for out-of-region funds.”
BDC Venture Capital’s involvement in the Atlantic fund is part of an aggressive strategy it has been deploying over the past two years. Senia Rapisarda, Strategic Investments and Initiatives’ Vice-president says that “the creation and growth of tech companies is vital to Canada’s long term economic well-being.” “We’ve been working hard with partners from coast-to-coast to build up our ecosystems and ensure our most promising entrepreneurs get the backing they need”, she adds.
Headquartered in Halifax and led by Patrick Keefe, an experienced local investment manager, the Atlantic Canada Regional Venture Fund will act regionally rather than on a per-province basis. It will also go beyond financing by offering training programs for entrepreneurs in whose companies it invests.