Backgrounder
To build on the momentum of the Venture Capital Action Plan (VCAP), the Government of Canada announced in 2017 the Venture Capital Catalyst Initiative (VCCI). As with VCAP, VCCI was implemented to support the continue development of Canada's venture capital industry and increase the availability of capital for innovative Canadian firms.
Through VCCI, the Government committed to investing up to $450 million through three streams:
- Stream 1 established a portfolio of four large, private sector-led funds-of-funds (HarbourVest Partners, Kensington Capital Partners, Northleaf Capital Partners, and Teralys Capital)
- Stream 2 supported five fund managers with diverse fund management teams, new models, or were located in emerging regions (Brightspark, Build Ventures, Garage Capital, Highline Beta, and TandemLaunch)
- Stream 3 invested into three venture capital funds with investment strategies focusing primarily in the clean technology sector (ArcTern Ventures, Cycle Capital, and Renewal Funds)
The Government of Canada's investment under VCCI garnered significant investments from the venture capital industry. In particular, the four funds-of-funds managers attracted investments from a diverse set of investors that included pension funds, high-net-worth individuals, corporations, banks, and the government of Quebec. Leveraging the federal government investment, the four funds-of-funds raised $1.176 billion, including $840 million from private investors.
The fund managers have completed their fundraising activities and are now beginning to make investments. Given that investments are only now beginning to flow, this year performance metrics reporting will focus on the fundraising data for the four funds-of-funds managers.
Key VCCI metrics
Section 1: VCCI Funds-of-funds program overview
Metrics in this section relate to the activities associated with the four VCCI funds-of-funds.
VCCI Funds-of-funds fundraising
| Fund-of-fund | Raised capital |
|---|---|
| HarbourVest Canada Growth Fund II | $326,250,000 |
| Kensington Venture Fund II | $150,000,000 |
| Northleaf Venture Catalyst Fund II | $300,000,000 |
| Teralys Capital Innovation Fund 2018 | $400,000,000 |
The four funds-of-funds raised $1.176 billion from public and private sector investors, including approximately $279 million from the Government of Canada.
Chart 1: Type of investors participating in VCCI
| NumberFootnote 1 of investors | Total commitments (C$M) | % of total | |
|---|---|---|---|
| Canada (private sector) | 30+ | 752.8 | 64.0% |
| Canada (public sector) | 2 | 336.1 | 28.6% |
| Europe | 3 | 42.5 | 3.6% |
| United States | 6 | 13.2 | 1.1% |
| Rest of world | 2 | 31.8 | 2.7% |
| Grand total | 42+ | 1,176.3 | 100% |