The Business Development Bank of Canada (BDC) is launching a $500 million equity investment fund for growing businesses that are led by women.
Posted at 10:45 a.m.
Called “Excelles”, it is in fact a three-pronged “investment platform” which, according to the BDC, is the enhanced continuation of the $200 million “Women in Technology Fund” which was launched in 2017 by its BDC Capital division.
In five years, this “Women in Technology Fund” has made 38 investments in women-led businesses, eight of which have already made a successful exit to financial self-sufficiency.
According to the BDC, the business ecosystem that has developed around this first fund involves 7,500 businesswomen and entrepreneurs from across Canada.
With its new “Excelles” investment platform, planned for $500 million, BDC is taking “a bold initiative that demonstrates the immense potential of women-led businesses for investors,” according to Isabelle Hudon, President and Chief the management of the federal state bank specializing in financial support for developing SMEs.
“This investment (in Excelles) aims to shine a light on women entrepreneurs by giving them greater opportunities and a better chance of succeeding on the world stage. We believe that the incredible potential of these women can become an important lever of economic prosperity for the country. »
In three parts
Announced Wednesday in Toronto, as part of the Elevate conference dedicated to technology entrepreneurship, BDC’s new Excelles investment platform is made up of three distinct elements.
The first and main element of the platform is a $300 million fund for direct investments in “distinguishable women-led Canadian tech companies.”
The second element of Excelles is a $100 million “laboratory fund” for direct investments in “women-led businesses that show promising business models and growth potential, but do not necessarily meet the criteria traditional means of obtaining venture capital investments”.
Finally, the third element of the new financial platform of the BDC is an amount of 100 million for “indirect investments” in favor of SMEs run by women.
According to BDC’s intentions, these “indirect investments” consist of investments made by its BDC Capital division in investment funds that are led by women and that are geared towards businesses that are also led by women.
In the first iteration of BDC’s Women in Tech Fund, launched in 2017, the indirect investment stream of $20 million was shared among five specialized, women-led investment funds. These funds were then able to raise from other investors an amount of 364 million in additional capital to that provided by BDC Capital.
Challenge prejudices
Among the reasons for launching Excelles, BDC management says it found that “start-ups founded by women need to work harder to get the financing they need and continually do more with less, compared to similar businesses run by men. »
However, underlines the BDC, an analysis by the firm “Boston Consulting Group” reveals that start-up companies led by women have revenues per dollar invested “significantly higher” than those of companies of comparable status that are led by men.
“We know there’s still a lot of work to be done to eliminate bias in the corporate finance industry, but we believe we’re on the right track,” said Michelle Scarborough, managing partner of the Women in Technology Fund and of the Excelles investment platform at BDC.
“Over the past five years, we’ve invested in some incredible women-led businesses in Canada that are transforming their respective industries,” said Ms.me Scarborough.
And looking forward, “we are already seeing tremendous opportunities in the market. There’s never been a better time to invest in women-led businesses. »