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BDC Launches $135M Industrial Fund

BDC Capital today unveiled a new $135 million venture capital fund to support Canadian energy, industrial and cleantech start-ups with global potential.

The BDC Capital Industrial, Clean and Energy Technology Venture Fund II will follow on the first fund of the same name, which has invested in 18 Canadian companies, including CarbonCure Technologies of Dartmouth.

These funds are not exactly cleantech funds because they are designed to back new industrial technologies that are improving the efficiency of large enterprises. However, Tony Van Bommel, senior managing partner of ICE Funds I and II, stressed in an interview that all these new technologies reduce the resources needed by industry, and therefore benefit the environment.

“We’ve tried to position it as an industrial, clean and energy technology fund because we think cleantech is slightly limiting in describing what we’re doing,” said Van Bommel. “But every investment we make is aimed at [creating] a better way of doing something. Resource efficiency is one of the over-riding principles”

The first ICE fund was launched in 2011 with $152 million, and has had some exits. Earlier this month, its Vancouver-based portfolio company Bit Stew, which developed an advanced data integration platform for utilities, was purchased by GE for US$153 million.

BDC Capital’s first ICE fund also invested in such companies as quantum computing pioneer D-Wave Systems, data center power management provider Ranovus, and power conversion innovator GaN Systems.

Van Bommel, a Dalhousie University grad, said the new funding means his team will now have a total of $287 million under management. He added that he plans to expand the team to enhance its expertise to keep pace with new technologies that are coming into the marketplace.

The second fund will invest in 15 to 20 new high-impact Canadian startups that demonstrate efficiency and strong scalability, said BDC Capital in a statement.

“Our goal is to intensify our support for innovative Canadian entrepreneurs who are leading the way in the transition to a low-carbon economy,” says Jérôme Nycz, Executive Vice President of BDC Capital. “Our first ICE fund demonstrated strong performance against international peers in a market that is a key target industry for the government of Canada.”

Fund II will invest in late seed and Series A companies, with some Series B companies also considered. The fund envisages an initial five-year investment period followed by a five-year harvest period during which exits are anticipated.

Added Van Bommel: “We seek to bring Canadian technologies to the world and accelerate resource efficiency, while targeting significant investment returns. Our existing fund has invested in all regions of the country and includes some of Canada’s most successful venture-backed companies.”