Export Development Canada (EDC) is expanding its Investment Matching Program for small and medium-sized exporting companies. The program jumps from matching up to $5 million in capital to matching up to $25 million, and is available through qualified venture capital and private equity investors.
Through the program, EDC leverages the work of venture capital or private equity investors for an expedited due-diligence and approval process.
The Crown corporation established the investment matching program in response to the COVID-19 pandemic, looking to quickly provide equity funding to Canadian small and medium-sized enterprises.
The EDC aims to increase access to capital for businesses at different growth stages, including those facing systemic barriers
Since its launch in April 2020, the program has supported over 110 companies with a total of over $390 million in co-investments, according to the EDC. Of the total, 38 per cent have a cleantech focus, and 18 per cent are led by management teams or founders from what the agency calls “equity-seeking groups” These include women, Indigenous, Black, and other people of colour, LGBTQ+ people, and people with disabilities.
Carl Burlock, EDC’s executive vice president and chief business officer, told BetaKit in 2022 that thanks to its expanded eligibility at that time, the capital would be accessible to a wider range of businesses at different growth stages, including businesses owned or run by those facing unique and systemic barriers, like women, Indigenous peoples, and Black Canadians.
To be considered for the Investment Matching Program, companies must have international expansion as a key corporate priority, must have a new term sheet created with an aligned, qualified Canadian or international institutional venture capital or private equity investor, and have revenues of at least $500,000.
Businesses with revenues of up to $10 million may be able to access up to $10 million in matching investments, while mid-market companies—with revenues over $10 million—may be able to access up to $25 million in matching investments from EDC.
The program increases the capital available to Canadian companies by matching their new investors on the same terms and conditions. By relying on the due diligence done on the companies by these investors, which it calls partners, rather than repeating it, EDC is able to expedite approval in as little as 30 days. The goal is to enable entrepreneurs to more efficiently access growth capital and focus on growing their businesses.
“This expansion is about responding quickly to the needs of Canadian exporters at different growth stages,” said Guillermo Freire, Senior Vice President Mid-Market Group, EDC. “EDC is working to build Canada’s share of international trade by accelerating the success of Canadian companies. Working closely with our qualified private-sector partners, we can make a bigger impact through enhanced support, making sure that exporters get the capital they need, when they need it.”
Catherine Desaulniers Lamy, corporate finance manager of the Montreal-based bus-rental platform Bus.com, said EDC’s program enabled it to be agile during its funding process, and solidify and grow its presence in the United States.
Although the Investment Matching Program was set up as a temporary response to the pandemic, EDC made the program permanent in February 2022.