BDC Capital has launched its second information technology venture fund, IT Venture Fund II, sized at $150 million. The fund, which brings capital managed by the BDC Capital IT Venture Fund group to $300 million, will be focused on Series A and B financings of mature startups that “have a product in market and are already generating revenues from customers,” Managing Partner Robert Simon said. The fund will thereby help address a mid-stage financing gap now facing Canadian software companies, Simon said. Fund II, which will continue to lead most of its deals and leverage syndicate partners, has already made 11 investments. They include online retailer Cymax, which raised US$25 million last October.
BDC Capital launches IT Venture Fund II, a $150 million venture capital fund to help build global Canadian IT companies
Montreal, February, 17, 2016 – BDC Capital is launching its IT Venture Fund II, a new $150 million venture capital fund for the Canadian information technology (IT) sector. This second fund brings the amount under management by the BDC Capital IT Venture Fund group to $300 million, all of which is helping to build and support a new generation of global Canadian IT market leaders.
“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.” The fund targets Canadian companies in the mobile, Internet, enterprise, cloud solutions and financial tech sectors who are disrupting existing industries or creating entirely new markets.
Investments have already begun
BDC Capital’s IT Venture Fund investing partners based out of Montreal, Ottawa, Toronto and Vancouver are now looking for investment candidates across the country. Eleven investments have already been made from the new fund into rapidly growing companies like Waterloo’s Axonify, Vancouver’s Cymax and Montreal’s Hopper. High performing Canadian IT companies who know they’ll be needing mid-stage financing soon, as well as early-stage investors who are looking for a financing partner for their portfolio companies, are also encouraged to get in touch directly. BDC Capital IT Venture Fund managers can be reached via BDC Capital’s website.
BDC Capital’s IT Venture Fund typically leads the majority of its financing rounds, while making the connections with other leading Canadian and US co-investors to attract them to the current and subsequent rounds. “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.” Helping investees beyond direct funding is central to BDC Capital’s approach. The IT Venture Fund is active, for example, on the board of directors of most of its 43 portfolio companies across Canada.
IT Venture Fund II was entirely allocated from proceeds of previous IT Venture Fund investments and other earnings from BDC and BDC Capital. In recent years, the IT Venture Fund group has realized a number of sizeable exits. It earned the Canadian Venture Capital Association’s (CVCA) “Deal of the Year” award in 2011, 2012 and 2014 for its exits from Radian6 (sold to Salesforce), Q1 Labs (sold to IBM) and Layer 7 (sold to CA Technologies). The IT Venture Fund team includes Managing Partner Ron Warburton, Partners Steven Abrams, Andrew Lugsdin and Peter Misek, as well as Associate Director, Matt Roberts.
About BDC Capital
A subsidiary of the Business Development Bank of Canada (BDC), BDC Capital offers a full spectrum of specialized financing and investment solutions to help Canadian entrepreneurs achieve their full growth potential. With more than $1.6 billion under management, BDC Capital takes a strategic, patient approach to nurture companies’ development over the long term.
From venture capital and equity, to growth and transition capital, our team of over 100 experienced, local professionals partner with entrepreneurs to identify and meet their needs on flexible terms. Some of the sectors in which we specialize include IT, industrial/clean/energy technology, and healthcare. For more information, please visit www.bdccapital.ca or follow us on Twitter at @BDC_Capital.
Courtesy of BDC Capital
Take your pick!
- Buyouts delivers exclusive news and analysis about private equity deals, fundraising, top-quartile managers and more. Get your FREE trial or subscribe now.
- VC Journal provides exclusive news and analysis about venture capital deals, fundraising, top-quartile investors and more. Get your FREE trial or subscribe now.