June 6, 2019
BDC Capital, the investment division of the Business Development Bank of Canada, has launched a C$250 million Industrial Innovation Venture Fund. The fund invests in early to late stage firms in the industrial technology sector, including agriculture and food, resource extraction, and advanced manufacturing technologies. The fund’s goal is to enable technological innovation and commercialization in key Canadian industrial sectors. Joseph Regan, formerly of Export Development Canada, joined BDC in 2019 to become the fund’s managing partner.
The Industrial Innovation Venture Fund complements BDC Capital’s existing activities, most notably their Industrial, Clean, and Energy Technology Venture Fund (ICE Fund). The ICE Fund, active since 2001, invests in “capital-efficient and scalable businesses enhancing resource productivity with the potential to operate across a global market”. Indeed, commentators have noted that the two funds appear “quite similar in their goals and strategy, as both seek to support industrial technology and work in similar legacy sectors”. However, by continuing to focus on industrial technology with this new fund, Jérôme Nycz, Executive Vice President of BDC Capital, argues that BDC Capital is “doubling down on developing transformative solutions for core Canadian industries”.
While Nycz pointed out that “industrial sectors have tended to be slow to digitalize”, it appears that this pattern is reversing, as investors increasingly target Canada’s traditional industries, which are often sectors where Canada has a global competitive edge. For example, Calgary-based Rio Investment Partners recently launched a new venture capital fund that specializes in agricultural and food technology investments across North America. “The deployment of capital at the intersection of technology and the agri-food value chain has never been more compelling,” said Jean Francois Huc, co-founder and managing partner of Rio Investment Partners.
The agricultural and resource sectors are significant drivers of the Canadian economy. As technology, innovation and venture capital investment combine in these domains, it will be interesting to witness the growth in industrial innovation.
Author: Andrew Patel