Financing Innovative Canadian Companies - Federal and Ontario Governments Announce a New VC Fund of Funds

Yesterday, the federal and Ontario governments announced the latest steps in establishing new Venture Capital funding for Canadian Companies. The new Northleaf Venture Catalyst Fund will invest primarily in Canada-focused early-stage and mid-stage venture capital funds and directly in companies across Canada.

The Fund had its initial closing with $217.5 million in commitments, of which $145 million is from private sector investors and $36.3 million is from each of the Governments of Canada and Ontario. The Fund has an overall target size of $300 million.

It is great to see that governments are following through on their commitments to Canadian Innovators and businesses. From a Lilly Perspective, ensuring that life sciences and pharmaceutical researchers and the start-ups that flow out of their world class research have available financing streams is very important.

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It is also part of the new Lilly approach to innovation and research. Lilly announced its involvement in the establishment of a Life Sciences fund in 2012. Joining with other Quebec, Canadian and international organizations, the initial offering of $150 million into TVM Life Science Ventures VII was an important part of supporting Canadian research and business excellence.

These initiatives are a big deal for the life sciences sector in Canada. From the perspective of the TVM Life Science Ventures VII Fund:

  • this Fund will be one of the largest of its type in Canada;
  • it has attracted global financing interest;
  • it is creating and sustaining new research and jobs right here in Canada;
  • these investments share the goal of improving the health outcomes of patients around the world, and;
  • the establishment of Lilly's Chorus division in Montreal reinforces the dynamic, innovative research ecosystem in that City but also to other important research clusters across the country.

To read more about these announcements, check out the links below:

Media Release: Governments of Canada and Ontario Help to Create Jobs and Growth with New Venture Capital Fund of Funds

Backgrounder: Establishment of Northleaf Venture Catalyst Fund

Venture Capital Action Plan - as announced in January 2013

Link to TechCrunch article on the VC Fund Announcement:

"Risk capital is vital for Canada's economic future and indeed for the long-term prosperity of all Canadians. The Venture Capital Action Plan is helping to revitalize Canada's venture capital sector and increase private sector investments. The new Fund being announced today will increase the supply of capital and other resources that high-growth firms require to reach their potential, and create jobs and growth."- Jim Flaherty, Minister of Finance

"Ontario is proud to be working with the private sector on a new fund that will strengthen the venture capital industry in our province. This initiative builds on the successful Ontario Venture Capital Fund 'fund of funds' model, which was created by the Ontario Government to stimulate investment in the province. The new Northleaf Venture Catalyst Fund will help ensure that more high-growth companies and innovative ideas can access the funding they need to grow the market, compete globally and create good jobs in Ontario."- Reza Moridi, Ontario Minister of Research and Innovation