BDC Capital rolls out C$150-mln IT Venture Fund II

By Staff Writer

Feb 19, 2016 02:14 AM EST

BDC Capital has launched IT Venture Fund II with a focus on Canadian information technology (IT) sector. The second IT-focused venture fund has a corpus of C$150 million. With an objective of bridging gap in the mid-stage funding, the new fund will support new generation of IT entrepreneurs in Canada.

BDC Capital, a subsidiary of Business Development Bank of Canada, has earlier launched first IT Venture Fund. The latest IT Venture Fund II takes the total amount managed by BDC Capital IT Venture Fund to C$300 million. The fund mainly targets mature startups. 

Private Equity Wire reports that the latest Venture Fund II will extend funding support to Canadian companies in internet, mobile, enterprise, cloud solutions and financial tech sectors. The new breed of technology entrepreneurs is creating totally new markets. 

Robert Simon, Managing Partner of the BDC Capital IT Venture Fund, said "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."

The Venture Fund II will focus on leading deals and leverage syndicate partners. It has made 11 investments in firms including Cymax, which raised $25 million in October 2015. The investing partners in IT Venture Fund II are based in Montreal, Ottawa, Toronto and Vancouver. They're looking for potential candidates across Canada, as reported by PE HUB.

Simon further added that "we wanted to address the mid-stage funding gap or capital crunch, now facing growing software companies in Canada." The IT Venture Fund mainly leads financing rounds. It'll also guide them to forge alliance with Canadian and US Co-investors to participate in the subsequent rounds.

BDC Capital has over $1 billion under management and guides companies in strategic approach. The proceedings from previous IT Venture Fund investments and other earnings of BDC and BDC Capital have been allocated to IT Venture Fund II, according to Tech Vibes.

IT Venture Fund II focuses on building network with investors and companies. Simon further explains: "This is how we'll do things with Fund II as well. As a company grows, it is important to have relationships to bring in later stage investors for expansion."

Canadian IT companies with a successful track record are eligible to take financial support from IT Venture Fund. The new Fund II will also provide funding support to companies, who anticipate mid-stage financing in near future. However, early-stage investors, who need financing partner for investing in portfolio companies can also access the participation of the IT Venture Fund II.

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