Long Awaited Cash Infusion for Canada's Entrepreneurial Growth Engine - Major Investment from Private Sector and Government
The new pool of capital will finance private venture capital funds, that in turn, invest in information technology, life sciences, and cleantech companies across Canada. "Teralys is, once again, well positioned to help lead the Canadian Venture capital industry towards a strong future", said Scott MacDonald, Co-founder of McRock Capital. "Access to venture capital is critical for Canadian entrepreneurs building world-class technology companies. A healthy and successful venture capital industry is absolutely necessary if Canada is to keep pace in the global innovation race."
Teralys Capital Innovation Fund is an investment partnership between the Federal Government's VCAP program, the Government of Quebec and the private sector. Teralys is pegging its final close of the fund in 2015 with maximum commitments from the Governments of Canada and Quebec of $62.5 million each. As part of the VCAP mandate, Teralys was required to attract private sector investors to leverage the Government's investment.
This much needed funding comes at a critical time for Canada's domestic venture capital industry which has struggled for the past decade with a some some rare exceptions. According to the CVCA, the amount of capital raised by VC funds declined in the second quarter of 2014 by a whopping 71% to a paltry $112 million versus the same quarter last year. By comparison, the NVCA reported that the US venture capital industry raised $7.4 billion in the second quarter of 2014. It is anticipated that capital flows from the VCAP program will stimulate long-term venture capital investment in Canada.
Other investors in the new Teralys fund include:
- BDC Capital Inc. (on behalf of the Government of Canada)
- Caisse de Depot et Placement du Quebec
- Fondaction CSN
- Fonds de Solidarite FTQ
- Investissement Quebec (on behalf of the Government of Quebec)
- National Bank
- OpenText Corporation
In January of this year, the first of the four new federally funded private sector-led fund-of-funds, Northleaf Venture Catalyst Fund, was launched with $217.5 million of funding. There was no mention in today's announcement by Finance Mister Joe Oliver of the anticipated two remaining VCAP fund managers. "We are thrilled by today's announcement from the Federal Government and Teralys", said Whitney Rockley, Co-founder of McRock Capital. "If Canada is to foster entrepreneurial high-growth companies and corporate Canada is to remain globally competitive, a strong and vibrant domestic venture capital industry is of paramount importance."
McRock Capital is an investment firm co-founded by venture capital veterans Scott MacDonald and Whitney Rockley and invests exclusively in Industrial Internet of Things companies across Canada and the US. The Industrial Internet of Things is about the intersection of machines, sensors & deep analytic software in large industrial markets. Follow McRock Capital on Twitter @McRockCapital
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