The New Brunswick Innovation Foundation increased its applied research funding about 150 percent in its most recent fiscal year, though its direct venture capital investment dropped.
The Fredericton-based innovation and venture capital group has issued its annual report for the 2018-2019 fiscal year (which ended March 31). It shows the foundation invested a total of $5.2 million in 19 VC investments, including three commitments that had been committed but not closed at year-end. That’s a drop of 16 percent from $6.2 million in the previous fiscal year.
The annual report also outlines the foundation’s contributions to applied research and R&D. It funded $9.7 million in applied research, more than double the $3.9 million figure of the previous year. And its Innovation Voucher program – in which private companies can work with approved researchers to conduct R&D – received $1.7 million, compared with $2.1 million a year earlier.
NBIF participated in a range of transactions in which other parties invested a total of $90.1 million – an increase of almost three times over $32.6 million in the previous fiscal year.
“We know that innovation is a continuous cycle of iteration and experimentation,” said CEO Jeff White, who assumed his role in October 2018, in his comments in the report. “It takes time, and resources, to get it right. But when you do, the impact can be significant, as we have seen repeatedly here in New Brunswick.”
NBIF has a dual function. It invests in and nurtures early-stage innovation companies, and it helps to finance research that can help New Brunswick companies. Its two VC funds nurture startups and it also helps New Brunswick companies fund R&D in the province’s research institutions through its Innovation Voucher and Applied Research programs.
NBIF’s Venture Capital Fund, which invests in scaling companies, invested a total of $4.62 million in the following companies:
Beauceron Security $750,000
Kognitiv Spark $500,000
Resson Aerospace $227,368
Smart Skin $500,000
Sonrai Security $334,787
Stash Energy $250,000
The Startup Investment Fund invests in new companies, and it committed a total of $550,000 as follows:
Canum Nanomaterials $250,000
The report noted that NBIF received an internal rate of return of 96 percent from its two-year, $513,000 investment in Envenio, a Fredericton-based company that specializes in fluid dynamics. It was purchased last fall by California vaping company Juul for an undisclosed price. In June, the CVCA presented NBIF with a 2019 Private Capital Regional Impact Award for its investment in Envenio.
The 2018-19 fiscal year covered one of the strongest periods ever for venture capital investment in New Brunswick. The Canadian Venture Capital and Private Equity Association, or CVCA, stated that VC investment in New Brunswick in calendar 2018 amounted to $78 million, almost four times as much as the previous year.
Most of the funding came in three deals, all of which featured NBIF participation: Cybersecurity company Sonrai Security raised US$18.5 million (C$24.6 million); relationship intelligence company Introhive raised US$15.2 million in an equity-and-debt round; and AgTech data company Resson raised $14 million.
Disclosure: NBIF is a client of Entrevestor.