Yellowknife-based Indigenous business accelerator EntrepreNorth has spun up its first fund in a push to help fill Northern Canada’s risk capital gap for entrepreneurs.
The organization announced today that the Sinew Impact Fund has completed a first close of $8 million CAD towards its $10-million target. It also made its first investment: a loan to EntrepreNorth Growth Program graduate Aurora Heat, a Fort Smith, NWT-based social enterprise that makes reusable, beaver fur-based hand, feet, wrist, and body warmers.
Through its Sinew Impact Fund, EntrepreNorth plans to invest in Indigenous entrepreneurs with lived experience or cultural ties to the Yukon, Northwest Territories, and Nunavut.
“I don’t think that there’s a fund like this anywhere in Canada.”
Kristin Richard,
Sinew Impact Fund
“This has been a dream of EntrepreNorth [since] long before I started, probably five [or] six years ago now,” Sinew Impact Fund co-founder and managing director Kristin Richard told BetaKit in an interview. “It came to be because the entrepreneurs coming through [our] growth program still struggled to access capital to grow and to really launch their business.”
The sector-agnostic, Indigenous-led fund will provide loans, equity, and revenue-based financing to early-stage, revenue-generating, majority Indigenous-led and owned businesses. It will cut cheques of anywhere between $50,000 and $1 million and offer post-investment support from EntrepreNorth.
“We wanted to be able to support entrepreneurs where they’re at, build financial tools that are really rooted in Indigenous values, and offer a mix of whatever is the best fit for the business at that time,” Richard said.
The Sinew Impact Fund’s investors consist of a mix of Canadian foundations, family offices, and impact investors, including the Mastercard Foundation, Dragonfly Ventures, Definity Foundation, Inspirit Foundation, Heart Lake Committed Capital, family members represented by Unit E Investments, federal government-backed Realize Capital Partners, and the Laidlaw Foundation. The fund has reserved the remaining $2 million for Indigenous wealth holders.
While the Sinew Impact Fund is open to all types of businesses, Richard said she would not be surprised if the fund made some technology-related investments. She noted that AI and data sovereignty are a big area of interest. Though the fund does not plan to support firms developing weaponry, she could potentially see it investing in dual-use tech for defence and civilian applications.
Richard said Sinew Impact Fund aims to support between 40 and 50 companies, with an average deal size that likely lands somewhere around $250,000. The impact-first fund plans to prioritize increasing access to capital over financial returns as it believes “the greater risk is leaving Northern communities under-financed.”
Richard said there are few local capital providers in the North beyond federal and territorial economic development agencies and Indigenous financial institutions, which often have a low risk tolerance and can take a long time to deploy capital. While some more southern organizations are interested in the North, many lack the local relationships that EntrepreNorth has built.
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“I don’t think that there’s a fund like this anywhere in Canada,” Richard said. The closest comparable is likely Vancouver’s Raven Indigenous Capital Partners, a multi-stage, impact-driven venture capital firm that backs Indigenous-led tech and other businesses across the continent, and where Richard previously served as an investment analyst.
EntrepreNorth, which gets its funding from government and private foundations, got its start in 2018 as a project of the MakeWay Charitable Society’s northern platform. Since then, the Indigenous-led hub has supported more than 450 Indigenous entrepreneurs in or from Canada’s North with educational programming and mentorship. Earlier this year, EntrepreNorth transitioned into an autonomous, charitable, non-profit organization.
Richard said today’s Sinew Impact Fund milestone is the product of three years’ worth of groundwork, and “a lot more capital than we initially thought that we would be raising.”
All images courtesy EntrepreNorth.