BDC Capital is launching another $250 million CAD growth equity fund to help mid-market Canadian companies scale.
Through the new fund, BDC Capital, the venture arm of the Business Development Bank of Canada, plans to make minority equity investments in strong, growth-stage businesses.
Like Fund I, Fund II aims to fill the funding gap between late-stage VC and larger, more mature companies.
The fund brings the amount under management by BDC Capital’s Growth Equity Partners to $425 million. Like Fund I, Fund II aims to fill the funding gap between late-stage venture capital (VC) and larger, more mature companies. BDC Capital launched Fund I in 2017.
“Our goal with Fund II remains the same – to unlock ownership transition challenges and help businesses scale into global leaders in their field,” said Claude Miron, managing partner of growth equity at BDC Capital.
According to Miron, Fund I’s original investment thesis led to more than $775 million of revenue growth for its portfolio companies and the creation of over 5,400 jobs. “Our Fund I investee companies more than doubled in size in less than four years – providing significant value to all stakeholders,” he said.
Fund I invested $175 million in 18 Canadian companies, supporting their organic growth, acquisitions, and ownership transfers. These investments included a recent $14 million investment in LiveBarn, and “a significant re-investment” in Budge Studios.
Fund II will provide capital to Canadian firms in the form of minority equity investments of between $3 million and $35 million. BDC noted Fund II will also work alongside companies to help facilitate ownership transfers, succession planning, shareholder liquidity, and business consolidation.
Fund II has already made its first deal, investing an undisclosed amount in Pliteq Holdings, a commercial sound control building products company. BDC Capital said the funding positions Pliteq “to accelerate investments in new products and innovations while further building its global sales force.”
BDC Capital’s Growth Equity Partners consist of 16 investment professionals based in Montréal, Toronto and Vancouver. The firm is actively looking for investment candidates across Canada for Fund II.
Growth Equity Partners Fund II is the second venture fund BDC Capital has launched this month. The business development bank unveiled a new $200 million deep tech fund in early May.
Photo courtesy of BDC