BDC Capital filling gap in mid-stage investments with $150 million Venture Fund

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BDC Capital announced the launch of its $150 million IT Venture Fund II completely dedicated to companies in the IT sector.

Robert Simon, managing partner of the BDC Capital IT Venture Fund, said that it will focus on direct series A and series B investments in companies that already have a product in market and are already generating revenue. The decision to tap into the IT sector comes weeks after Reuters released a report stating that Canadian VC investment was at a 14-year high after hitting $2.5 billion in 2015, and the IT industry took the biggest share of those VC dollars.

“We wanted to address the mid-stage funding gap, or ‘capital crunch’, now facing growing software companies in Canada,” he said. “The fund targets Canadian companies in the mobile, Internet, enterprise, cloud solutions, and financial tech sectors who are disrupting existing industries or creating entirely new markets.”

BDC has already made eleven investments in startups through the fund, including Waterloo-based Axonify, Vancouver-based Cymax — which recently raised a $30 million series A, led in part by BDC Ventures — and Montreal-based Hopper.

IT Venture Fund II was established from proceeds of previous IT Venture Fund investments and other earnings from BDC and BDC Capital. The company said it will continue its approach of making the connections with Canadian and US co-investors to attract them to the current and subsequent rounds.

“As a company grows, it is important to have relationships to bring in later stage investors for expansion. Helping investees beyond direct funding is central to BDC Capital’s approach. The IT Venture Fund is active, for example, on the board of directors of most of its 43 portfolio companies across Canada,” said Simon.