It’s official. The new BC Tech Fund is up and running.
Following the excitement of the Province’s announcement of a $100MM investment in venture capital, the BC Government announced Kensington Capital Partners as the private sector Fund of Funds manager to oversee the investment of the BC Tech Fund.
With over $1.1 billion in assets under management, Kensington Capital has a track record in managing private equity and venture capital funds. Headquartered in Toronto, Kensington has established an office in Vancouver and announced their first BC Tech Fund investment in Moj.io.
The BC Tech Fund will be solely managed by Kensington and will be invested across multiple sectors including digital media, information and communications technology, life sciences and health tech and cleantech. As part of the mandate, Kensington will undertake activities designed to grow the venture capital ecosystem in BC and attract new capital into the province.
The BC Tech Fund is focused on mitigating the Series-A funding gap in BC and will consist of both direct investments into tech companies as well as investments into venture capital firms.
- 25% of the fund will be invested directly into companies as a co-investment with other VCs with a target size of $1 – 3 million per investment
- 75% of the fund will be invested in venture capital firms with a goal to help create and attract more VCs to BC. Investments in any one venture capital firm will be limited to $15 million or 15% of the fund
The announcement is an important milestone in the province’s #BCTECH Strategy – and one that will help to rebuild the early stage venture capital ecosystem in British Columbia.
As outlined in our 4-Point Plan, fully realizing the growth potential of the BC tech sector requires a healthy and robust venture capital ecosystem. Many of BC’s leading tech companies – Westport, Sierra Wireless, Avigilon, D-Wave and BuildDirect – benefitted from venture capital investments at key stages of their growth.
With a growing number of startups in recent years, coupled with the decline in the number of venture capital funds in British Columbia, early stage companies have found it increasingly difficult to raise capital to fund their growth.
For many years, the BC tech community coalesced around the importance of rejuvenating early stage capital in British Columbia. It was an issue discussed in the 2014 BC Technology Report Card and in our 2014 4-Point Plan. We continue to emphasize its importance in the recently released 2016 versions of both the BC Technology Report Card and 4-Point Plan for Growth.
In our recommendations to policy-makers, we emphasized the importance of balancing four key considerations: a) sufficient scale and leverage b) sustainability and track record c) speed of action and d) local presence. We’re pleased to see that the BC Tech Fund is up and running within a year of the original announcement and we congratulate both the Province and Kensington Capital Partners in mobilizing what we believe is the single largest investment in venture capital in the history of BC.
As Minister Virk observed in his speech, “This is a mission in progress, not a mission accomplished.” We welcome your continued input and participation as we continue to work with the province to further the priorities outlined in the #BCTECH strategy, and to ensure the findings in the 2016 BC Technology Report Card and 4-Point Plan are reflected in policy and action.
More information on the new BC Tech Fund announcement can be found here.