Minister Valdez announces new investments to spur innovation and help diverse entrepreneurs scale their business Français

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Innovation, Science and Economic Development Canada

Jul 30, 2024, 11:50 ET

TORONTO, July 30, 2024 /CNW/ - Investments and access to capital are key to growing and supporting startups with high growth potential. This is especially true for entrepreneurs who have traditionally been under-represented in the start-up space, including women and members of Indigenous, Black and 2SLGBTQI+ communities.

Today, the Honourable Rechie Valdez, Minister of Small Business, announced the Government of Canada's second $25 million investment in five more venture capital (VC) fund managers as part of the inclusive growth stream of the renewed Venture Capital Catalyst Initiative (VCCI). The five VC funds managers are:

This second round of new funding completes the $50 million in inclusive growth investments included in the renewed VCCI. The inclusive growth stream will help advance diversity, equity and inclusion in the Canadian VC ecosystem by increasing access to capital for diverse fund managers and entrepreneurs so they can continue to transform new ideas into innovative business solutions for Canadians, strengthen our economy and create good jobs.

As part of a combined $450 million investment in venture capital funds and funds of funds, the renewed VCCI is expected to inject at least $1.6 billion into Canada's innovation capital market when leveraged with other public and private investments. These investments are expected to generate returns for the government. Budget 2024 also committed an additional $200 million to support venture capital for equity-deserving entrepreneurs and to invest in underserved start-up ecosystems outside key metropolitan areas.

Each recipient will be required to report their progress on enhancing diversity and gender equality across the VC ecosystem. This will help ensure that more firms owned by women and other members of under-represented communities in the small and medium-sized enterprise space have access to the capital they need to scale and grow, and it will strengthen Canada's economy.

Quotes

"Supporting diverse and under-represented entrepreneurs in the venture capital sector is not only the right thing to do; it is also essential to boosting Canada's economy to its full potential. This new round of VCCI funding is going to address historic challenges for entrepreneurs and start-ups led by diverse individuals, who have historically and unfairly encountered barriers to funding because of their identity. Our government is committed to giving everyone a fair chance at bringing their passion and innovative ideas to the table, no matter who they are or where they come from. We're doing this by making more capital available to firms led by women and other members of under-represented communities, which will jump-start the development of the new generation of bright and diverse Canadian entrepreneurs and innovators."

– The Honourable Rechie Valdez, Minister of Small Business

Quick facts

  • Together with investments from the private sector, the renewed Venture Capital Catalyst Initiative (VCCI) is expected to inject around $1.6 billion into Canada's innovation capital market.
  • The recipients announced today were chosen as a result of a rigorous selection process informed by a private sector selection committee of highly qualified industry experts as well as experts at the Business Development Bank of Canada (BDC) and Innovation, Science and Economic Development Canada.
  • The Canadian venture capital (VC) ecosystem has grown significantly over the past decade, with annual investments increasing from $1.9 billion in 2013 to $6.9 billion invested in 660 deals in 2023. Canada ranks in the top five in terms of VC investment as a percentage of GDP, according to the Organisation for Economic Co-operation and Development.
  • In addition to the VCCI, the Government of Canada also delivers the Inclusive Women Venture Capital Initiative under the Women Entrepreneurship Strategy. This $15 million initiative aims to strengthen the VC environment for Canadian women entrepreneurs and make it more inclusive. It supports projects that help strengthen the capacity of women entrepreneurs to access VC funding, contribute to the increasing representation of women in the VC industry, and help ensure that the VC industry is sensitive to gender and potential unconscious bias.
  • BDC is Canada's most active single VC investor, managing over $4.2 billion in VC investments. BDC is also increasing VC investments to help increase diversity in the area, having recently launched its $500 million Thrive Venture Fund and Lab for Women, the largest investment platform of its kind in the world.
  • In June 2024, BDC created two new $100 million platforms to support Indigenous and Black-led businesses. These platforms are under development and will complement the Thrive platform for women.

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SOURCE Innovation, Science and Economic Development Canada

Contacts: Callie Franson, Communications Advisor, Office of the Minister of Small Business, [email protected]; Media Relations, Innovation, Science and Economic Development Canada, [email protected]

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Innovation, Science and Economic Development Canada