Venture Capital Catalyst Initiative

Investing in great ideas

Overview

Access to capital is vital to help growing innovative companies to develop their ideas, market new products, scale up and create good, middle-class jobs in communities across the country.

Venture capital (VC) is a specialized type of private equity financing that takes educated risks on great ideas and smart people, giving young, high growth-potential companies the opportunity to develop their ideas into marketable products. In addition to capital, VC investors bring operational experience, technical knowledge, networks and mentorship to the firms in which they invest. A strong and steady stream of VC investments is an essential element in the success of many of Canada's potential future technology leaders.

In 2017, Canada saw a total of $3.5 billion of VC investment in Canadian start-ups, resulting in the eighth straight year of VC growth and the most VC invested in start-up companies since 2001. Canada is now ranked third for VC investment according to the Organisation for Economic Co-operation and Development (OECD). The Canadian Venture Capital and Private Equity Association (CVCA) attributes much of this growth to the Government of Canada's support for VC, including through the Venture Capital Action Plan (VCAP).

To continue this momentum, Budget 2017 made available $400 million through the Venture Capital Catalyst Initiative (VCCI) in two streams. Stream 1 invested in large funds-of-funds to support Canadian VC fund managers. Stream 2 invested in emerging managers, underserved regions and sectors, and alternative fund structures. Finally, the 2018 Fall Economic Statement introduced a new $50 million stream (Stream 3) under VCCI that will support VC funds investing primarily in clean technology firms.

Selected Recipients under Streams 1 and 2

Using a transparent and competitive process, and informed by the recommendations of the VCCI Selection Committee that was used for Streams 1 and 2, the Government sought to build a portfolio of large funds-of-funds and alternative models that strengthens and broadens the Canadian VC ecosystem, and increases the availability of late-stage VC over time.

The following five funds-of-funds managers selected under Stream 1 were announced on June 26, 2018:

  • Hamilton Lane
  • HarbourVest Partners
  • Kensington Capital Partners
  • Northleaf Capital Partners
  • Teralys Capital

Further, the following seven VC fund managers selected under Stream 2 were announced on November 5, 2018:

  • AmorChem
  • Brightspark
  • Build Ventures
  • Garage Capital
  • Highline Beta
  • Pique Ventures
  • TandemLaunch

The Call for Expressions of Interest for Streams 1 and 2 is now closed.

Additional information relating to these streams can be found on the VCCI Streams 1 and 2 webpage.

New VCCI Stream 3: Investing in Clean Technology

The 2018 Fall Economic Statement introduced a new stream (Stream 3) under VCCI. This stream will invest $50 million into VC funds investing primarily in clean technology firms, helping Canada's innovative clean technology producers to bring their technologies to market. A thriving market for clean technology will help all firms across Canada improve their efficiency and lower their carbon pollution footprint.

Applicants under Stream 3 will be evaluated on a number of factors, including investment strategy, management capabilities, fundraising strategy, and overall impact on the Canadian venture capital ecosystem. All applicants are required to meet minimum thresholds of Canadian presence and investment levels, and to adhere to detailed code of conduct and reporting requirements, including a focus on gender and diversity. Detailed instructions on the application, submission and selection process can be found on the Call for Expressions of Interest (Stream 3).

Similar to Streams 1 and 2 of VCCI, an expert selection committee will make investment recommendations to the government for VCCI Stream 3 investments. An additional industry expert with experience in the clean technology sector will be added to the VCCI selection committee.

Contact

Email: capital@canada.ca
Telephone (toll-free in Canada): 1-800-328-6189
Telephone (Ottawa): 613-954-5031
Fax: 343-291-1913
TTY (for hearing-impaired): 1-866-694-8389
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Business hours: 8:30 a.m. to 5:00 p.m. (Eastern Time)

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