BDC Capital, a subsidiary of the Business Development Bank of Canada, has launched its IT Venture Fund II, a $150 million venture capital fund aimed at supporting the Canadian information technology sector.
This second fund brings to a total of $300 million the amount managed by the BDC Capital IT Venture Fund group, which targets mature start-ups in the mobile, Internet, enterprise, cloud computing and financial technology sectors.
“The fund focuses on direct mid-stage investments (also known as Series A and B financing) in more mature startups that have a product in market and are already generating revenues from customers,” said Robert Simon, Managing Partner of the BDC Capital IT Venture Fund. “We wanted to address the mid-stage funding gap, or ‘capital crunch’, now facing growing software companies in Canada.”
Although the fund has just been announced, it has already made 11 investments, in companies like Waterloo’s Axonify, Vancouver’s Cymax, and Montreal’s Hopper.
The fund is aimed at that middle stage of funding, the Series A and Series B rounds, which are generally more difficult to come by for companies who’ve grown out of their seed round funding and are ready to graduate to the next level.
BDC Capital’s IT Venture Fund has representatives on the boards of most of its 43 portfolio companies, signalling its active participation in helping companies navigate the North American investment landscape.
“This is how we’ll do things with Fund II as well,” continued Robert Simon. “As a company grows, it is important to have relationships to bring in later stage investors for expansion.”
Early-stage investors, as well as companies who are likely to be needing mid-stage financing in the near future, are encouraged to get directly in touch with BDC Capital’s IT Venture Fund management team, which includes includes Managing Partner Ron Warburton, Partners Steven Abrams, Andrew Lugsdin and Peter Misek, as well as Associate Director, Matt Roberts.
Fund II was allocated from revenue realized through previous investments and other earnings from BDC and BDC Capital.
Several companies the IT Venture Fund has previously invested saw significant exits, including Radian6, which was sold to Salesforce, Q1 Labs, which was sold to IBM, and Layer 7, which was sold to CA Technologies.
BDC Capital manages over $1.6 billion to develop its long-term strategy for the growth of Canadian companies.