On Tuesday, BDC Capital, the $3 billion investment arm of Canada’s state-funded bank for entrepreneurs (BDC), announced that it is moving into the red-hot growth equity investment space. The bank is launching a $300 million venture capital fund, dubbed the Growth Venture Co-Investment Fund, that will invest in late-stage Canadian growth companies across industry verticals, alongside partner funds.
“Our entire team is thrilled to be continuing our work of deploying late stage capital to emerging industry leaders who need it to fuel their continued expansion,” BDC Capital Managing Partner Dominique Bélanger said in an official statement. “We can all see that the Canadian market has greatly matured over the past decade, with many recent technology IPOs and more coming.”
Last month, BDC Capital launched a $250 million fund, Growth Equity Partners Fund II, which partners as a minority equity investor in Canadian startups, in bite sizes of $3-35 million, bridging the financing gap between late-stage venture capital and corporate maturity. That fund was also designed to offer an attractive financing alternative to midmarket companies, by allowing entrepreneurs to retain operational and financial control of their firms. Growth Equity Partners II made its first investment platform in a proptech startup, building acoustics firm Pliteq Holdings.
The Growth Venture Co-Investment Fund will differ in that it will have the capacity to make larger investments over the lifespan of the portfolio, to support Canadian companies as they scale up and compete with global companies for ever larger funding rounds in the pre-IPO market. Companies supported under the initial Co-Investment Fund include water infrastructure analytics firm Aquatic Informatics and robotics firm Avidbots.
“During the life of the initial Co-Investments Fund we were pleased to find both a strong appetite for collaboration among investors and significant market demand,” BDC Capital Executive Vice President Jérôme Nycz said. “Consequently, we believe that by doubling down on our commitment, this successor fund will play an important role in maintaining the long-term growth of VC backed companies and supporting them on their path to becoming global tech leaders.”
Earlier this spring, BDC Capital announced yet another $200 million fund to invest in early-stage deep tech Canadian companies. BDC said the funds will be used to accelerate the development of “transformational technologies” including quantum computing, electronics, photonics, and foundational AI.
“BDC Capital is proud to be a trailblazer for investing in Canada’s transformative technologies. These have high potential for growth and are of strategic importance for Canada,” BDC’s Nycz said upon announcing the deep-tech fund. “Our hope is to further cultivate Canada’s leadership position in these nascent industries by empowering talented entrepreneurs and engaging other like-minded stakeholders.”