BDC Capital, the venture arm of the Business Development Bank of Canada (BDC), has announced nearly $1 billion in new fund commitments aimed at late-stage Canadian tech companies.
The investment comes as venture capital activity in Canada declines, with late-stage funding nearly cut in half in 2023 compared to 2022.
Strengthening Growth-Stage Investment
BDC Capital will deploy:
- $500 million into its Growth Venture Fund (GVF), which will now make direct and co-investments in high-growth companies.
- $450 million into its Growth Equity Partners (GEP) program, which takes minority stakes in Canadian mid-market businesses.
The GVF has previously backed companies like ApplyBoard, Borrowell, and Verafin, targeting firms with $10M+ in revenue.enhance customer experiences and maximize lifetime value.”
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Addressing Canada’s Late-Stage Investment Gap
BDC’s new commitment aims to prevent top Canadian startups from seeking foreign investment, ensuring they scale within Canada.
Geneviève Bouthillier, EVP of BDC Capital, emphasized:
“What we’re aiming to do is to share the risk with companies so they can continue their growth.”
Debate Over BDC’s Role
Not all industry leaders agree with BDC’s focus on late-stage companies.
Mark McQueen, former CEO of CIBC Innovation Banking, argued:
“The biggest problem is in the seed and early-stage part of the market.”
BDC, however, maintains that it remains active at the early stage, citing its $50M Seed Venture Fund (SVF) launched in 2023, which has already made seven investments.
Looking Ahead
With $6 billion in assets under management, BDC Capital’s latest funding push positions it as a key player in Canada’s innovation ecosystem. Whether its late-stage focus will benefit the country’s broader startup landscape remains a topic of debate, but for now, Canada’s high-growth tech companies have a new domestic funding source to scale.
