BKR Capital secures initial $20 million for second Black Innovation Fund

Last year, Black-led startups in Canada received only $10 million in venture capital (VC), spread across just 11 businesses, according to the 2026 Black Startup Funding Report. BKR Capital hopes to change that. Thanks to new funding, the VC firm is now armed with $20 million to help close the funding gap for Black founders in Canada—and it’s looking to raise more.

“What we are seeing is a growing and increasingly sophisticated pool of founders from the Black Community, while access to capital has not kept pace.”
Lise Birikundavyi, BKR

The Toronto-based firm announced on Monday morning that it has closed an initial $20 million for its second Black Innovation Fund. After investing in 15 companies with its inaugural $20-million fund, BKR is targeting a final close of $50 million for Fund II to “back the next generation of globally competitive Black-led technology companies,” the firm said in a statement.

BKR now expects to invest in approximately 25 companies through Fund II, co-founder and managing partner Lise Birikundavyi told BetaKit in an email. She added that initial cheques will range from $250,000 to $1.5 million, supported by the firm’s “strong follow-on strategy” to back its top-performing companies over time.

The second fund follows what BKR called “the strong performance” of its inaugural fund, which is “tracking as a top-quartile performer for its vintage,” the firm said in a statement. BKR added that many of its investments have “experienced meaningful revenue growth and have begun expanding internationally.”

BKR’s portfolio includes companies like Toronto-based cybersecurity startup Protexxa, Calgary-based FinTech startup Woveo, and Montréal-based benefits platform Workind.

“By identifying exceptional founders who have historically been overlooked by traditional venture networks, we are seeing the kind of strong financial performance that comes from investing in innovation before the broader market recognizes its value,” BKR general partner and co-founder Isaac Olowolafe said in a statement.

Black founders face 97-percent funding shortfall

The Black Startup Funding Report, released by BKR and Rep Matters, found that only 0.15 percent of all VC deployed in Canada last year went to Black founders. Ninety percent of those deals were at the pre-seed and seed stages, where BKR’s investment thesis is focused. While that thesis will largely remain the same with the second fund, BKR is addressing that early-stage bottleneck by supporting Series A rounds now as well, Birikundavyi told BetaKit.

“What we are seeing is a growing and increasingly sophisticated pool of founders from the Black Community, while access to capital has not kept pace,” Birikundavyi said. “Fund II is about doubling down on that opportunity with even greater conviction.”

The Black Startup Funding Report estimates that there was a $292 million funding gap for Black founders last year, or a 97-percent shortfall compared to if VC was proportionally allocated according to the Canadian Black population share. While Birikundavyi said that “there has been meaningful progress over the past few years, particularly in terms of awareness” of the funding gap, she added that there is still a significant rift between founder pipeline growth and available capital to support it.

“As the ecosystem matures and performance data continues to emerge, this is increasingly becoming a clear and undercapitalized segment of the market,” Birikundavyi said. “We are starting to see more institutional investors engaging, and we believe those who do so early will be best positioned to capture the opportunity and generate both strong financial returns and broader economic value.”

So far, BKR has courted backing from institutional investors, such as the Royal Bank of Canada, Boann Social Impact Fund, Cap Finance Social Finance Fund, the Business Development Bank of Canada, and Export Development Canada, for its second fund. Birikundavyi told BetaKit that Fund II’s first investment will be announced “soon.”

Feature image courtesy BKR Capital.