BDC Capital has launched a $250 million Industrial Innovation Venture Fund to invest in tech companies and entrepreneurs working in agriculture, foodtech, resource extraction, and advanced manufacturing.
“Industrial sectors tend to be slow to digitalize, yet these sectors often represent areas where Canada has a global competitive edge.”
Through the new fund the investment arm of the Business Development Bank of Canada (BDC) aims to invest in early to late stage companies that use innovative technology, processes, and business models to drive productivity and competitiveness in Canada’s industrial sectors, to ultimately help these companies commercialize. Joe Regan, formerly working in cleantech venture capital at Export Development Canada, will join as the new fund’s managing partner.
“BDC Capital is excited to be a first mover again, this time supporting innovation and technology adoption among core competitive industries like ag-tech, resource extraction and advanced manufacturing with our new venture capital fund,” said Jérôme Nycz, executive vice president of BDC Capital.
The Industrial Innovation Venture Fund joins a small group of Canadian VC firms that already invest in sectors like ag-tech, food tech, and resources, including Calgary-based Rio Investment Partners, (which recently launched of a new $77.5 million CAD VC fund focused on agrifood, ag-tech, and food-tech), as well as Vancouver-based Evok Innovations, with a $100 million fund investing in companies in the oil and gas sector.
Nycz also noted “This [new] fund is complementary to our existing work with the Industrial, Clean and Energy Technology (ICE) Venture Fund, and by launching the Industrial Innovation Venture Fund, we are doubling down on developing transformative solutions for Canadian industries.”
BDC’s ICE Venture Fund, active since 2001, invests in early and development stage companies operating in advanced materials, oil and gas, among other sectors, that are look to enhance resource productivity. The two funds do appear quite similar in their goals and strategy, as both seek to support industrial tech, working in similar legacy sectors, like ag-tech, advanced manufacturing, and resource extraction [oil and gas].
Nycz told The Globe and Mail there may be “some overlap” between the ICE Venture Fund and the Industrial Innovation Venture Fund, but BDC plans commit more resources for the new fund than the ICE Fund for industrial technology. He said BDC Capital will then review the strategy of the fund to determine any redundancies.
“Industrial sectors tend to be slow to digitalize, yet these sectors often represent areas where Canada has a global competitive edge,” said Nycz. “The fund’s goal is to meet the urgent demands of the next generation of forward-thinking business leaders who want to participate in the industries that drive the Canadian economy.”
BDC Capital has invested in over 700 companies, with over $3 billion under management. According to The Globe, Regan will manage a team of eight to 10 in Toronto, Montreal, and Western Canada, as well as four or five investment partners.
“With this new $250 million fund, BDC Capital is encouraging innovation in traditional industries where venture capital has not yet engaged at a large scale in Canada,” said Kim Furlong, CEO of the Canadian Venture Capital and Private Equity Association (CVCA). “This shows how venture capital can accelerate Canada’s growth across a variety of sectors and industries.”
Image courtesy BDC Capital