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Business in Vancouver

BC’s C$100m tech fund drops C$15m into Vancouver firm

Vanedge is ‘a clear market leader,’ according to the fund manager

PUBLISHED : Thursday, 03 November, 2016, 11:23am
UPDATED : Thursday, 03 November, 2016, 11:26am

Vancouver-based Vanedge Capital is the first venture capital fund to benefit from the province’s C$100 million (US$74.7 million) technology fund.

Toronto’s Kensington Capital Partners, which opened an office in Vancouver last month to manage the BC Tech Fund on behalf of the province, announced Tuesday (November 1) it was investing in the well-known local venture capital fund.

Kensington managing director Rick Nathan told Business in Vancouver the investment amounts to C$15 million (US$11.2 million).

The BC Tech Fund is a fund of funds, which requires Kensington to invest primarily in other venture capital firms that would in turn invest money into tech start-ups.

“We would expect that most of the investments that are fund of fund investments out of that [BC Tech] Fund would be smaller than that [C$15 million],” Nathan said.

“But Vanedge, in our view, is a clear market leader from a performance standpoint.”

Nathan added that Kensington’s successful relationship with Vanedge is one of the other reasons it scaled up its investment to C$15 million.

Although the BC Tech Fund is a fund of funds, Victoria is allowing Kensington to invest C$25 million (US$18.7 million)directly into start-ups.

The first recipient of the money earmarked for Kensington’s direct investments went to Mojio, a software developer specialising in connecting cars to the Internet.

Kensington did not disclose how much Mojio received but Nathan said it was in the range of $1-3 million.

Premier Christy Clark announced last December the government would create a C$100-million technology fund to spur growth in the province’s tech sector.

She said a fund manager would be announced in the spring, however, the fund did not launch until October when Kensington Capital was officially unveiled as the fund manager.

Sources tell BIV the fund’s launch was delayed due to the complexity of the agreement. A total of 12 groups delivered proposals to the BC government to manage the fund before three were shortlisted.

Although Kensington is based in Toronto, the firm brought on one of its BC-based advisory board members, Gerri Sinclair, to lead the Vancouver office.

Sinclair previously served as president of the Premier’s Technology Council.

The provincial government expects the fund to last no more than 15 years, while an unknown portion of the C$100 million will be covered by gains from the fund made after 2023.