The National Bank of Canada has completed its initial capitalization of $200 million for the National Bank SME Growth Fund, L.P.
Announced in July, as a new venture capital fund partnership with the Quebec government to support the digital transformation of small to medium-sized enterprises (SME) and their recovery following the COVID-19 pandemic, the fund has attracted over 245 private investors. National Bank did not disclose the current amount it has raised for the new fund.
“We’re proud to be able to contribute to the economic recovery and the vitality of the regions.”
Businesses can now apply for financing. The fund is meant to support businesses with their transfer, growth, and acquisition projects. To be eligible, businesses must have assets of less than $200 million or a net worth of less than $100 million, request financing between $500,000 and $15 million.
Other qualifications include, having a detailed business plan and project plan, have growth prospects, be a private company with an adequate capital structure, and have been profitable in two of the last three years or have had sustained and significant sales growth over this period.
“It’s important for us to continue to support them during this time of change,” said Luc Ménard, executive vice-president, managing director and head of private investments at National Bank. “The SME Growth Fund will allow us to offer concrete solutions to help them seize new development opportunities. We’re proud to be able to contribute to the economic recovery and the vitality of the regions.”
According to an April report from Startup Genome, 58 percent of startups in Canada said their industry had been “affected significantly” by the COVID-19 crisis, seven percentage points higher than the global average. Another report from the Business Development Bank of Canada found that 90 percent of Canadian entrepreneurs have felt the impact of the pandemic. Cash flow, in particular, has been cited as a top concern for startups during the crisis.
National Bank already has a corporate venture capital arm, called NAVentures, which invests in, partners with, and scales early to mid-stage companies, including FinTech startups like Mylo, Flinks, and Koho. National Bank Investments, an investment fund management firm and a subsidiary of the bank, will serve as the new growth fund’s manager.
As of October 31, 2020, the National Bank of Canada held $332 billion in assets and has more than 26,500 employees.