The Business Development Bank of Canada (BDC) has unveiled $250 million CAD in new commitments to support women, Black and Indigenous entrepreneurs.
The commitment includes two $100-million CAD platforms under its investment arm, BDC Capital, which will be designed to support Indigenous and Black-led businesses, complementing its existing $500-million Thrive platform for women entrepreneurs. It also includes a $50-million loan and training program for underserved entrepreneurs, and the creation of a new internal team at the bank aimed at supporting those entrepreneurs.
“Taking a platform approach, supporting, and mentoring founders, while providing equity and equity-like capital in a culturally sensitive way is of utmost importance.”
Geneviève Bouthillier, BDC’s senior vice-president of growth and impact investments, who is currently leading the creation of the two platforms, told BetaKit she hopes these new allocations will address a crucial gap for Black and Indigenous entrepreneurs, while also harnessing the growing opportunities within these communities.
Indigenous people are creating new businesses at nine times the national average, contributing $48.9 billion to Canada’s gross domestic product in 2020 alone, according to Bouthillier, who cited data from Statistics Canada.
Bouthillier also noted that over the past decade, the number of Black-owned businesses has grown over 60 percent, far exceeding the national average of six percent.
“Just in terms of sheer numbers, [the opportunity is] really interesting, and it’s growing faster than other communities,” Bouthillier told BetaKit in an interview. “[These entrepreneurs are] young, they’re smart, they innovate, and it’s a great opportunity for BDC to help propel them.”
In a statement announcing the new capital allocations, BDC claimed it increased its number of women and Indigenous clients by 11 percent and 22 percent, respectively. The bank also claimed it has committed over $8 billion to underserved business owners to date, both directly through programs like the Indigenous Entrepreneur Loan and Thrive platform, and indirectly through partners like Futurpreneur, BKR Capital, and Raven Indigenous Capital Partners.
The two new BDC Capital platforms for Black and Indigenous entrepreneurs will complement BDC Capital’s existing $500-million Thrive platform, which consists of the Thrive Lab, a venture fund that makes direct investments in women-led technology businesses, and an indirect investment envelope for women-led and focused general partners.
A BDC spokesperson told BetaKit Thrive’s venture fund has grown to 18 portfolio companies, its lab has five portfolio companies, and its indirect envelope has invested in six women-led or co-led funds to date.
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However, it’s not currently clear how similar these new platforms will be in practice when compared to Thrive. Bouthillier noted both platforms are in very early stages of development, and each platform will be different and tailored to the needs of each community, rather than taking a “cut and paste approach.” Finding the right individuals to lead the platforms is also key, she said, before the details of each platform are set in stone.
“We’re at the stage where we’re listening, and we don’t want to assume what’s good,” Bouthillier added.
To that end, BDC Capital is engaging with its ecosystem partners, such as BKR Capital, to, as Bouthillier put it, “get [the] right people around the table.” BDC’s spokesperson noted that the firm is specifically looking to hire senior leaders for the new platforms who identify as members of the Black and Indigenous communities.
Bouthillier, who joined BDC in March from Caisse de dépôt et placement du Québec, is leading the creation of the two platforms until those key leaders are in place. It’s not clear how long it will take to hire those leaders—Bouthillier noted she “would love it to be next week, but it’s going to take time.”
Part of the new allocation will go towards a new $50-million loan and voluntary training program, which will provide up to $350,000 to entrepreneurs who identify as women, Indigenous, or Black.
The loan program is specifically targeted to early-stage entrepreneurs with revenues under $3 million. The training component, accessible to both successful and unsuccessful loan applicants, aims to equip entrepreneurs with essential business skills. According to BDC’s spokesperson, the training covers fundamental topics such as crafting a business plan, securing an initial loan, and preparing for the first round of external funding.
The final piece of BDC’s latest commitment is to create an Inclusive Entrepreneurship team within the bank, specifically targeted at better supporting women, Indigenous, and Black business owners.
The new team falls under the leadership of BDC executive vice-president and chief operating officer Véronique Dorval. It currently includes 10 employees, four of whom are part of BDC’s Virtual Business Centre who work exclusively with Black and Indigenous entrepreneurs.
“This is an internal team that’s going to help the bank respond better and faster to underserved communities,” Bouthillier added. “They’ll have a client-centric approach, and we’re also going to have people from those communities on the team, so that they can share the same experiences as the client.”
While the signs of business growth for Black and Indigenous entrepreneurs are encouraging, it’s clear that these communities still face unique and systemic barriers to scaling their businesses.
A 2023 study from the Fraser Institute found that the gap in the amount of capital available to Indigenous businesses versus non-Indigenous businesses has grown faster than the level of market capital available to Indigenous businesses in Canada.
“At Raven, we have learned that taking a platform approach, supporting, and mentoring founders, while providing equity and equity-like capital in a culturally sensitive way is of utmost importance,” Althea Wishloff, general partner at Raven Indigenous Capital Partners, said in BDC’s statement. “We look forward to the growth of the ecosystem, new businesses being born, and new co-investors emerging.”
According to a survey conducted by Bain & Company, 72 percent of Black entrepreneurs earn annual revenues below $50,000, and 80 percent of Black entrepreneurs said they use personal savings to fund their businesses.
“A critical driver of creating intergenerational wealth for Black communities is equitable support for Black-owned businesses,” Lise Birikundavyi, managing partner of BKR Capital said in BDC’s statement. “With less than 0.5 percent of venture capital dollars in North America going towards Black entrepreneurs, there is a clear gap to fill.”
Feature image courtesy BDC.