Breaking News: BC Responds to Call for More Venture Capital in Tech Vertical
By the Canadian Venture Capital and Private Equity Association
The Province of British Columbia has taken another step forward in building on its innovation ecosystem with a new private sector-led venture capital fund to support the technology sector. This new, 15-year, $100-million technology fund—which the Government announced on Friday, Oct. 21st—will help fuel growth in the province’s vibrant tech sector, creating a new avenue for early-stage BC tech companies to access venture capital financing.
The CVCA welcomes this much-needed investment in the BC venture capital ecosystem as government-primed investments have proven themselves to have tremendous impact on the innovation and growth ecosystem.
The new BC Tech Fund is the first of three economy-building pillars in BC’s #BCTECH Strategy, a multi-year innovation agenda introduced by the BC Government earlier this year. Investments from the new fund will be targeted at BC initiatives in the technology sector, including digital media, information communications technology (ICT), life sciences and clean technology.
“The BC Tech Fund responds to the tech sector’s call for capital and aims to help promising BC tech companies grow their businesses,” says Amrik Virk, Minister of Technology, Innovation and Citizens’ Services.
Virk says the province executed a competitive procurement process to select the fund manager and ultimately chose Kensington Capital Partners for their strong connections, expertise within BC’s tech sector and the company’s ability to provide strong financial returns.
All BC Tech Fund investments will be made by Kensington. Kensington will also work alongside stakeholders from all regions of the province on activities that will help grow its VC ecosystem.
With 20 years of experience and reputable market insights, Kensington’s presence is well established in BC’s tech sector: The company has invested more than $100 million in various BC-based tech deals. Highlights from Kensington’s previous deals include a 2014 $30-million late-stage investment in quantum computer developer D-Wave Systems Inc. and, in the same year, a $16-million investment in BC software company Vision Critical, according to data in CVCA’s InfoBase.
Dr. Gerri Sinclair, a long-time supporter of BC’s technology industry, will lead Kensington’s Vancouver-based offices and BC operations. In addition, the firm has agreed that 100 per cent of its BC Tech Fund investments will be in A-Round funding deals.
Since signing the agreement, Kensington has already set their venture capital expertise in motion, having made an initial investment in cloud software growth company Mojio.
Founded in 2012, Mojio is headquartered in downtown Vancouver and is a leading developer in connected car app technology that provides real-time analytics on what’s happening under the hood of your car. In 2015, the Vancouver start-up raised $7 million in a Series A financing round, led by Telekom Capital and contributing funds Relay Ventures, BDC Capital Inc., Sakura Living Trust and Alps Investment Holdings LLC, according to CVCA’s InfoBase. As the company prepares to scale up and pursue international markets, the funding from the BC Tech Fund fuels Mojio at a critical time.
“The BC Tech Fund is a great example of how the provincial government is walking the walk when it comes to fueling tech innovation across BC,” says Mojio’s CEO, Kenny Hawk, in a press release prepared by the Government of British Columbia. “This funding will help us attract and retain top engineering talent and ensure we have the runway to launch in prioritized international markets throughout 2017.”
The CVCA commends the Government for inaugurating the BC Tech Fund as it illustrates the private sector’s commitment to expediting growth and job creation in the multi-billion-dollar tech sector and improving Canada’s innovation ecosystem as a whole.
Access to capital is no doubt essential for tech companies to succeed in a competitive global marketplace. Along with the BC Tech Fund, the province’s multi-year strategy (#BCTECH) includes programs to increase talent development and market access for tech companies committed to driving innovation and job creation in the province.
Other provinces have previously allocated venture dollars through local institutional organizations (e.g. Fonds de solidarité FTQ in Quebec and New Brunswick Innovation Foundation), but the BC Government’s decision to funnel their venture allocation through an established fund of funds is a fairly new approach that seems to be gaining ground. It immediately leverages Kensington’s organizational depth of talent, knowledge and contacts. The impetus for this announcement may be that the BC government has observed the previous BDC VCAP program, which was designed along a similar fashion and has been proven successful based on early data.
With the new fund, the BC Government is executing on the province’s already fertile ground to help seed more success stories, support driven entrepreneurs and help Canadian companies reach the global stage. This fund is a keystone step towards developing a sustainable venture capital system in BC and highlights the Government’s support in stimulating the province’s tech sector, strengthening the local business landscape and creating an investment environment that sparks economic growth.