The federal government has named six funds that will be responsible for doling out the $50 million slotted for the life science stream of the renewed Venture Capital Catalyst Initiative (VCCI).
The six fund managers are AllosteRx Advanced Therapies, Amplitude Ventures, CTI Life Sciences Fund, Genesys Capital, Pender Ventures, and Sectoral Asset Management.
The government renewed its commitment to VCCI in Budget 2021, promising $450 million across three streams.
The government renewed its commitment to VCCI in Budget 2021, promising $450 million across three streams. The three streams are funds-of-funds, life science, and inclusive growth. The announcement of the life science fund managers marks the second stream the government has chosen managers for.
The funds-of-funds managers, responsible for a collective $350 million in VCCI capital, were named in October. Of the four venture funds chosen, Kensington Capital Partners has been the only one to announce the close of its VCCI-backed fund.
The life science stream was promised $50 million as was the inclusive growth stream. When announced on Tuesday by Minister of Small Business and Economic Development Mary Ng, it was not revealed how much of the $50 million life science capital each of the six funds will receive.
Of the six funds, four are headquartered in Montréal—Amplitude, AllosteRx, CTI, and Sectoral—with Pender based in Vancouver and Genesys from Toronto.
Amplitude was spun out of the Business Development Bank of Canada (BDC) in 2019. BDC is the Crown corporation that manages VCCI on behalf of the federal government. Amplitude closed more than $200 million for its first fund in 2021, and has invested in Congruence, Deep Genomics, and others.
Pender is currently fundraising for its second fund and recently closed $50 million of a targetted $100 million. Pender’s portfolio includes DrugBank, Swift Medical, Jane Software, and Copperleaf, which went public on the Toronto Stock Exchange in 2021.
AllosteRx is an early-stage biotechnology venture firm that invests across Canada and the United States (US). According to The Logic, the VCCI capital will contribute to both its and Genesys’ current fundraising efforts. Genesys focuses on biotechnology, pharmaceuticals and medical technology sectors.
CTI invests across Canada, the US, and Europe with a focus on biotechnology and healthcare. According to The Logic, CTI is receiving $5 million from VCCI, which will go towards its third fund for which it’s secured $132 million in commitments. The publication also noted that Sectoral, which has been traditionally focused on later-stage private equity deals is moving into venture investing.
The VCCI program was first created in 2017 as a successor to the Conservative government’s venture-capital action plan (VCAP), which was launched in 2013. Budget 2017 earmarked $400 million over three years for the VCCI program. At the time, five funds rather than four were chosen to disburse the capital, with Hamilton Lane joining the current fund managers before backing out of Canada completely.
Streams in prior versions of VCCI included cleantech, which allocated $50 million to Renewal Funds, Cycle Capital Management, and ArcTern Ventures. A stream for alternative investment models dolled out $50 million to seven funds: Garage Capital; Build Ventures; TandemLaunch; Highline Beta; AmorChem; Brightspark; and Pique Ventures.
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