The Business Development Bank of Canada (BDC) announced on Wednesday morning the creation of a new $500 million investment program called Excelles, which intends to help exclusively Canadian businesses led or founded by women. The success of a first $200 million fund launched in 2017 prompted the Canadian institution to think bigger, at a time when venture capital is becoming increasingly rare for new entrepreneurs.
The launch of what the Business Development Bank of Canada calls the “Excellent Investment Platform” comes at a good time, as fears related to the global economic boom in the coming months increasingly weigh on the world of investment, which is therefore more cautious in the face of young companies. It’s a bit of a game of chance, admits BDC President and CEO Isabelle Hudon.
“The timing was chosen because it marks the end of the five-year cycle of our previous fund, but we can indeed see that the market is cooling,” she said in an interview with Le Devoir. “We are still the Business Development Bank of Canada. In times of crisis, we have always been there, that is our role. »
BDC’s approach is three-pronged: an initial tranche of $300 million will be used to make direct investments in companies run or that have been founded or co-founded by women. The institution imposes no limits on the sector of activity in which it plans to invest. The one constant is that these businesses must have a digital or technology component.
A second tranche worth $100 million will be given by the BDC Capital subsidiary to other funds, which will in turn invest in companies that are often smaller and more niche than those in which BDC considers.
The last $100 million will go towards the creation of what the BDC calls the “Excelles lab”. This envelope is also managed by BDC Capital and more specifically targets young tech companies at a very nascent stage of their growth. “It’s help that comes before the pre-seed capital,” says Isabelle Hudon. “There are a lot of women who have great ideas but can’t find funding to launch them. We work with partners from the start-up world to create an environment and direct support for these projects. »
7500 entrepreneurs helped
Launching a half-billion-dollar fund in a time when other investors may prefer to tighten their belts could make it easier to find projects for BDC, which is also building on the success of the Women’s Fund in technology that the institution launched in 2017 and whose value amounted to $200 million.
In five years, this fund has enabled the Bank to help some 7,500 entrepreneurs and businesswomen across Canada. It still has more than thirty companies that have benefited from this program in its portfolio, but it has also closed a few files that have been very profitable to it.
One example is the March 2021 acquisition by US photo giant Getty Images of Montreal-based royalty-free photo-sharing site Unsplash. The value of the deal has never been released, but Unsplash had raised over $30 million in private investments in the three years leading up to the deal, including a boost from BDC’s Women in Tech fund. and the Montreal fund Real Ventures.
A few days later, Beanworks, a Vancouver-based company specializing in cloud-based customer service tools, was sold for $83 million to the French company Quadient. BDC participated in a $10.1 million financing round by Beanworks in 2018.
The idea with the Excelles fund is therefore to reproduce this kind of scenario, hopes Isabelle Hudon. “This second fund is a bit of an extension of the previous one, but with a more ambitious team and with the intention of making more direct investment in [l’entrepreneuriat féminin] “, she concludes.