A prolific investor in climate tech companies in Canada is back with a second fund for ‘low carbon technologies’ – but this time the company plans to pump less money into the scene, on a longer period.
The Business Development Bank of Canada (BDC) on Wednesday launched a new $400 million fund for climate technologies, which it called a “renewed commitment” to help build “world-class Canadian companies in the field.” clean technology”.
BDC is state-owned and was created to stimulate economic development in Canada. Its recent venture capital deals include joining Samsung in a round for VueReal, which makes tiny displays with low power consumption. And earlier this year, BDC partnered with Toyota to fund e-Zinc, which is building zinc-air batteries that could help utilities store renewable energy when the sun isn’t shining.
BDC launched its first climate fund in 2018, with $600 million invested locally over four years. The investment firm plans to make its second, smaller fund last five years, even as climate change is accelerating.
Asked about the pullback, the fund’s managing partner, Susan Rohac, told TechCrunch that the firm is “sizing the offering into a more robust market with many other partners that we can work with.”
According to Rohac, BDC’s first fund was as important as it was because it was created to “address the lack of venture capital” for climate and cleantech startups in Canada. Since then, “for every $1 [BDC] committed, $6 was raised in additional funding from the private sector by our portfolio companies, simultaneously or after we invested,” Rohac said. In other words, the firm argues that its oversized first fund has created “more appetite for the private sector,” which will apparently make up for BDC Cleantech Practice’s scaled-down second act.
To date, BDC says it has financed 50 climate and cleantech companies through the fund, putting it in the same camp as other active investors in the scene, including Active Impact Investments and Sustainable Development Technology Canada (which is also supported by the Canadian government).
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