BDC Capital has named the managing director of its new Thrive Lab—one pillar of its recent $500 million investment in women-led companies.
Sévrine Labelle, formerly of Québec-based lending group Evol, is taking on the role of managing director of Thrive Lab.
With its managing director onboard, BDC plans to launch the Lab this spring.
Women-founded businesses received only three percent of venture capital in Canada last year.
Thrive Lab is one of the three pillars of BDC’s Thrive platform, which was allocated half-a-billion dollars last year. The Lab has $100 million of that funding to develop “innovative equity investment models for women-led companies” in order to fill “important gaps in early-stage financing.”
In an exclusive interview with BetaKit, Labelle said the Lab’s mandate is to find new ways of making equity investments into women-led companies, which have historically been dramatically underfunded.
“For many years now I’ve been noticing certain gaps in the investment world,” she said. “There’s a lot of money, there’s a lot of capital, but women-led businesses don’t necessarily get their fair share of that capital.”
Labelle comes from Evol where she led the lender as CEO for the past six years. Evol provides conventional loans for businesses run by entrepreneurs that come from diverse backgrounds. In a previous iteration, Evol focused on investing in women entrepreneurs.
When it comes to investing in women-led companies, BDC shared PitchBook data that shows women-founded businesses received only three percent of venture capital in Canada last year. Expanding that to women-founded and co-founded businesses, only 15 percent of seed capital was invested in these companies in Canada last year.
“There is a need to better understand that gap in more detail … to perhaps adjust certain ways of doing investment equity investment,” said Labelle.
“Our country will be much more prosperous if women are able to deploy their full potential,” she added.
The Thrive platform builds on the groundwork laid over the past five years by BDC’s $200 million Women in Technology (WIT) Venture Fund. BDC first launched the WIT Venture Fund in 2017 to help address the need for direct investment in Canadian early-stage, women-led tech firms and to make indirect investments in women-led funds.
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Of the half-a-billion dollars commitment, $300 million is for BDC’s direct investment fund, which will continue to invest in seed to Series B-stage startups. The final $100 million is for investing in women-led Canadian investment funds.
Michelle Scarborough, the managing partner of BDC’s WIT continues to lead the firm’s direct investing through Thrive Venture Fund. The indirect investment fund is being managed by BDC’s Fund Investment team. The venture fund is already deploying capital.
When BDC first announced Thrive in September, it promised to share more details on the Lab in the coming months. At the time, Scarborough told BetaKit the Lab would focus on companies at the pre-seed stage.
Labelle officially steps into the role today, and noted that there is still work to be done to finalize exactly what the Lab will look like. She told BetaKit that more details will come closer to the spring launch date.
For now, Labelle is focused on meeting with ecosystem players to understand where BDC’s Lab might be able to fill gaps for women-led companies. She noted that the Lab will likely work with partner organizations—from support groups and accelerators to venture funds—on education and co-investment opportunities.
The need for this women-focused initiative from the federally-backed BDC is clear. Data continues to show that women entrepreneurs are underfunded and face a variety of roadblocks in raising capital.
“There’s a lot of money, there’s a lot of capital, but women-led businesses don’t necessarily get their fair share of that capital.”
Mirroring the Canadian data, statistics from the United States show that all-women teams received just 1.9 percent of the $238.3 billion USD in venture capital allocated last year. This represents a 2.4 percent drop from 2021.
This low percentage points to a missed opportunity, according to numerous data sets that show companies led by women tend to have higher returns and outperform companies led by men.
Speaking with BetaKit last year, Scarborough noted that there are a number of reasons, including systemic bias, why women-led companies still face roadblocks. Canada’s VC community has “done a decent job of starting to move the needle, but we haven’t gotten there yet,” she said.
BDC’s half-a-billion investment in Thrive marks a ramp-up of the group’s commitment to the first WIT Venture Fund. In addition to adding on the Lab, BDC’s commitment to fund-of-fund investments is five times as much capital as the first WIT fund committed to indirect investing.
Through its WIT Venture Fund, BDC allocated $180 million towards women-led startups and $20 million to fund of funds investments in women-led firms. In total, the fund backed 38 companies, including Waabi, HiMama, Manifest Climate, and TealBook. BDC has finished making new investments through the WIT Venture Fund, but is holding some capital in reserve for its existing portfolio firms.
According to BDC, the WIT Venture Fund has seen eight exits to date, including Beanworks, Kira Talent, Unsplash, and Nudge. While the WIT Venture Fund invested in these companies, BDC’s initial investment in the first three firms listed pre-dates the creation of the WIT Venture Fund.
Regarding its fund-of-funds track record, BDC said 43 percent of the active portfolio of the BDC Fund Investment team (which will lead the Thrive indirect investing) is currently invested in funds that are women-led or co-led, or have women in partner-level roles. BDC claims this is double the Canadian average.
Feature image courtesy BDC.
