by Lynda Kiernan
BDC Capital, the investment arm of Canada’s only entrepreneur-focused bank, BDC, announced it is launching the $250 million Industrial Innovation Venture Fund.
The aim of the fund is to invest in tech entrepreneurs and startups that have the potential to disrupt Canada’s core industries including agriculture and food, advanced manufacturing, and resource extraction.
Under this mandate, the fund will make investments spanning early to late stage rounds in companies that are proving they have the ability to drive improvements in productivity and competitiveness in their respective supply chains through their innovative and transformative technologies, processes, and business models.
“BDC Capital is excited to be a first mover again, this time supporting innovation and technology adoption among core competitive industries like ag-tech, resource extraction and advanced manufacturing with our new venture capital fund,” said Jérôme Nycz, executive vice president, BDC Capital.
“This fund is complementary to our existing work with the Industrial, Clean and Energy Technology (ICE) Venture Fund, and by launching the Industrial Innovation Venture Fund, we are doubling down on developing transformative solutions for Canadian industries.”
Welcome News
The development and launch of this fund is good news for Canada’s agri-food tech investment space, which according to some, needs a boost.
“The people I’ve talked to are overlooking the sector — they don’t think it’s sexy enough, which is disappointing because the potential is there,” San Eng, Canadian entrepreneur and co-founder of Umai Global, told Country-Guide.
Meanwhile, Dave Smardon, president and CEO of Bioenterprise, a $285 million non-profit commercialization accelerator, noted “Investment in generic agriculture and agri-food is in a very dismal state of affairs.”
However, Aki Georgacacos, co-founder and managing partner of RIO, is more optimistic, saying, “Broadly, there’s been a recognition by government that they need to prime the pump for entrepreneurs. It’s getting better.
Only months ago, in April of this year, RIO Investment Partners made its own announcement of the launch of its own new venture capital fund dedicated to investments across the North American food and agtech sectors.
With an anchor investment of $77.5 million from Farm Credit Canada, the fund has an eventual funding target of $150 million.
“The creation of RIO represents a bold vision for agri-food tech venture capital investing,” said Georgacacos in April. “In today’s competitive environment, firms are either growing or shrinking and as a consequence, evolution is essential.”
“The deployment of capital at the intersection of technology and the agri-food value chain has never been more compelling,” said co-founder Jean Francois Huc. “I am excited to be joining the RIO team as the sector reaches an inflection point and reveals tremendous opportunities to build transformative companies.”
A Welcome Addition
BDC Capital also announced the addition of venture capital veteran Joe Regan as managing partner of the new fund. His deep well of experience in both venture capital and industrial operating positions him particularly well to successfully lead the fund toward achieving its goals of enabling technological innovation and commercialization in Canada’s key industries.
The launch of the Industrial Innovation Venture Fund is being acknowledged by both Canadian lending bodies and its government as a welcome development for a sector that is lacking investment capital, but has great potential for growth.
“With this new $250 million Fund, BDC Capital is encouraging innovation in traditional industries where venture capital has not yet engaged at a large scale in Canada,” noted Kim Furlong, CEO, Canadian Venture Capital and Private Equity Association (CVCA). “This shows how venture capital can accelerate Canada’s growth across a variety of sectors and industries.”
Added the Honorable Mary Ng, Minister of Small Business and Export Promotion, “This Fund demonstrates the value and the potential of Canada’s traditional industries to innovate and generate impressive companies that grow our economy and create middle class jobs.”