BDC Capital announced that it is investing $250 million in growth equity financing to high-potential and rapidly growing businesses over the next five years. The announcement fits within BDC’s recent commitment to offer $1.8 billion to increase support for asset-light, high-growth firms over the next five years.
BDC Capital said through the offering, it hopes to fill a gap between small-scale funding options available to smaller companies, and the larger-scale resources that are available to bigger companies.
“Mid-sized, high-growth companies are constantly looking for flexible, patient financing alternatives and this is exactly what we are proposing with today’s announcement,” said Jérôme Nycz, executive vice-president at BDC Capital.
BDC Capital said the $250 million offering will go towards Canadian businesses that have at least $5 million to $10 million in revenue. It will make minority equity investments ranging from $2 million to $25 million for equity withdrawals, owner transitions, or expansion purposes.
“We want to give ambitious and talented entrepreneurs the means to excel and grow in order to create a new generation of Canadian champions.”
– Jérôme Nycz
BDC Capital also said that depending on the companies’ capital needs, BDC Capital will determine whether it wants to lead, participate, or be the sole investor of the businesses.
“Our objective is to be a long-term, management-friendly partner that helps drive the growth of high-potential companies across Canada,” said Nycz. “We want to give ambitious and talented entrepreneurs the means to excel and grow in order to create a new generation of Canadian champions.
In addition to announcing the funding, BDC Capital also announced that Claude Miron, BDC’s former VP of investment and credit risk management, will join the investment arm as the vice-president of growth equity.
In November 2016, BDC Capital committed to funding a number of industries, including the launch of a $135 million fund for cleantech startups, and participating in a $1 billion fund for Alberta businesses.
In March 2017, PwC found that BDC Capital was the most active investor of 2016.