Caisse de dépôt et placement du Québec (CDPQ) has launched a new $250 million fund aimed at increasing diversity and inclusion in small to medium-sized businesses in Québec and Canada.
“We want to encourage SMEs to increase diversity in their organizations using a measurable objective.”
CDPQ claims the fund, called Equity 25³, is the largest Canadian fund ever created to target companies aiming to achieve diversity on their teams. Equity 25³ offers investments from $5 million to $30 million and targets profitable SMEs and promising technology companies based in Québec or elsewhere in Canada.
“It has been clearly established that greater corporate diversity positively impacts innovation, risk management, productivity and financial performance,” said Kim Thomassin, CDPQ’s executive vice president and head of investments in québec and stewardship investing.
“Through this dedicated fund, we want to encourage SMEs to increase diversity in their organizations using a measurable objective so they can benefit from this additional performance lever,” Thomassin added.
To be selected, companies must commit to having at least 25 percent of their boards, management teams, and shareholding comprised of people of diverse backgrounds, including women, visible minorities, Indigenous peoples, in the five years following confirmation of financing.
CDPQ will also provide the companies receiving funding with guidance to implement and execute a tailored diversity and inclusion plan.
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To qualify for funding, mid-market companies are required to show strong growth combined with a history of profitability. Tech companies will need to show strong growth in sales, solid recurring revenue, and a competitive offering.
While perhaps one of the largest, CDPQ’s is not the first diversity-focused fund in Canada. Last year, StandUp Ventures closed $21 million for its women-focused fund. More recently, the Atlantic Women’s Venture Fund launched an inaugural fund focused on addressing the gender imbalance in Canada’s venture capital ecosystem.
Equity 25³ comes at a time when the COVID-19 pandemic has highlighted the significant challenges faced by underrepresented entrepreneurs and workers in tech. A recent report indicated although the proportion of women on boards is increasing slowly, visible minorities are still vastly underrepresented on tech leadership teams
Another report from earlier this year found that women and minorities remain underrepresented in senior leadership roles in the Greater Montreal Area, despite an increase in representation within those roles.
Image source Unsplash. Photo by Christina @ wocintechchat.com.