Money seems to be flying around Montreal these days.
The Business Development Bank of Canada (BDC) and the Fonds de Solidarité du Quebec (FTQ) have announced a $30 million commitment to US-based Sanderling Ventures, an investment firm with a 35-year track record of building new biomedical companies.
Sanderling will now create a permanent facility for the development of early-stage life science projects in Montréal. The capital committed by BDC and the Fonds will be placed in a “Canadian parallel fund” to Sanderling Ventures Fund VII, which is close to achieving its target size of $250 million.
“Sanderling has developed a unique, Canadian-centered approach to address the structural and economic challenges facing life science opportunities as they transition from the research laboratory through development to ultimate commercialization,” said the BDC’s Neal Hill. “We are delighted to welcome Sanderling to Canada as they take on a greater role in the Canadian market. This partnership is a step in the right direction for the Canadian venture capital industry.”
Canadian investors have long sung the same song over and over again, about the need for more venture capital, particularly early-stage, and the need for more large-sized, innovative companies in Canada. Those same investors also state that government funds cannot continue be the only investors in funds, and that private investment is needed. But one more fund is one more fund, and Canadians should take this as what Hill called it: “a step in the right direction,” for both venture capital and life sciences funding in Canada.
The BDC is pouring $20 million into the fund while the FTQ is contributing $10 million. The initiative, which should result in a significant investment in the Montréal and Canadian life sciences sector, will shepherd early-stage projects further along the path to commercialization.
Sanderling and other syndicate investors may choose to invest further in the development of those projects, at that point. Previous closes of the fund have included co-investors such as the Mayo Clinic, GlaxoSmithKline, and the University of Pennsylvania.
FTQ vice president Alain Denis said the fund should help to keep Quebec talent in the province. The FTQ, he said, “is proud to be a financial partner of the Sanderling Ventures Fund VII which will have a positive impact on Quebec’s life sciences sector.”
“Led by an experienced drug development team in Montréal, this initiative will not only help keep Quebec scientists within the province, but also represents a unique opportunity to utilize the existing network of experienced Québec based universities and contract research organizations,” said Denis.
Today’s news comes just a few days after a recent Reseau Capital report stated that venture capital investment in Quebec is “booming”. After the first two quarters of 2013, investments in Quebec had totalled $246 million, more than double what was invested in the second quarter of 2012. Canada-wide, Québec dominated with 49% of all funds invested in Canada for the first six months of 2013, while Montréal accounted for 41% of all funds invested countrywide.
The news should add to those numbers for some healthy year-end statistics around VC activity for 2013.