Kensington Launches $160 Million Investment Fund Under Government’s Venture Capital Action Plan

Emerging technology companies in Canada received a piece of good news today when Kensington Capital Partners announced the launch of the Kensington Venture Fund with an initial closing of investor commitments totaling $160 million.

This move marks the next step in the Government of Canada’s Venture Capital Action Plan. This new fund of funds will invest in promising VC funds and companies in the technology, cleantech, IT, telecommunications, and digital media sectors. The announcement was made at the Canadian Innovation Exchange  today in Toronto.

“Canada needs a robust venture capital ecosystem that helps increase private sector investments in start-ups across Canada,” said Hon. Joe Oliver, Minister of Finance. “We all want the next global leaders—and the jobs that will come with them—to be founded here in Canada.”

According to CVCA data, Silicon Valley-based companies raise dramatically more capital than their counterparts in Canada (and elsewhere in the world), enabling them to grow faster and be the buyers when emerging companies consolidate. As a result, Canadian companies and entrepreneurs have been at a significant disadvantage. The VCAP aims to help level this playing field.

“By giving Canadian technology companies the ability to grow and thrive at home, this fund will help stem the gravitational pull that is driving so many of Canada’s leading entrepreneurs, engineers, scientists, and our most promising emerging technology companies to Silicon Valley,” said Rick Nathan, Managing Director, Kensington Capital Partners and former president of Canada’s Venture Capital and Private Equity Association.

The VCAP’s approach will be purely market-driven, which was a key requirement for investors. The government’s stake in the Kensington Venture Fund will be 33%, meaning that a majority of the investment will come from the private sector.

Investors in the Fund include Richardson GMP, OpenText Corporation, Royal Bank of Canada, BMO Financial Group, CIBC, TD Bank Group, and Scotiabank.