Developed in partnership with venture capital (VC) and private equity (PE) firms, EDC’s investment matching program partners with private sector investors to provide capital to Canadian small to medium-sized businesses (SMBs) that are direct or indirect exporters.
Through its investment matching program, EDC works with VC and PE investors to match private sector-led investments. EDC can match investments of up to $5 million CAD in businesses with a minimum annual revenue of $500,000 that have plans to grow their direct or indirect exports.
EDC first established the investment matching program as a temporary response to the COVID-19 pandemic, giving the Canadian export credit agency a means of quickly providing equity funding to Canadian SMBs.
In addition to converting the program into a permanent offering, EDC has also expanded its eligibility criteria, dropping the revenue threshold to apply from $5 million to $500,000, and speeding up the approval process to “as little as 10 days vs. the usual months.”
Since its launch in April 2020, EDC’s investment matching program has invested a total of $223 million in 84 Canadian companies across 94 transactions.
“Until today, customers needed to have revenue of $5M unless you fell into cleantech or an equity-seeking business,” Shelley MacLean, EDC’s principal of relationship management and corporate communications, told BetaKit. “Now we’ve made it the same for everyone and dropped it to $500K which is a big drop from $5M. The organization really wanted to open it up to more companies.”
By making the program permanent, EDC said it hopes to have “a greater impact on the international growth of more Canadian companies.”
“Providing capital to Canadian exporters in partnership with private sector investors quickly and reliably helps these businesses accelerate their international growth plans, and take advantage of emerging opportunities,” said Carl Burlock, EDC’s executive vice president and chief business officer.
In 2020, Burlock told BetaKit EDC was prepared “to put up to” $250 million CAD into the program.
According to EDC, 35 percent of the 82 firms EDC has invested in are focused on cleantech, while 23 percent are led by management teams and founders “who identify as members of equity-seeking groups.”
“Thanks to its expanded eligibility, this capital will be accessible to a wider range of businesses at different growth stages, including those facing unique and systemic barriers, like women, Indigenous Peoples, and Black Canadians,” said Burlock.
Feature image courtesy of EDC.