Build Ventures, the Atlantic Canadian venture capital fund, has received more than $40 million in commitments for its second fund, including backing from two bodies within the federal government.

The Halifax-based VC fund said Monday it has received $7.5 million in funding from the Venture Capital Catalyst Initiative, or VCCI. And in an interview, Build Partner Rob Barbara also said the company has a commitment for funding from BDC Capital, the VC arm of the Business Development Bank of Canada. He declined to say the amount of the BDC contribution.

Barbara added that the firm is on track to close funds worth $45 million and $55 million this year, and that its second fund could be investing in new companies early in 2019.

“We’ve still got a way to go, but we’re hoping to close the fund by the end of the calendar year,” said Barbara.

Headed by Barbara and Patrick Keefe, the group began five years ago with a $65 million fund, which has invested in 14 companies. With its first fund fully invested, its principals are now raising money for their second fund.

Build previously said it had received $15 million in funding from the Nova Scotia government for Fund II and is receiving $10 million from the New Brunswick government. Barbara declined to discuss talks with other provinces but indicated there would be private investment in the second fund.

Build Ventures invests in companies that are early stage yet have an established business model, a solid team, a large target market, are generating revenue and now need ramp-up capital. Investments are generally between $1 million and $5 million for each venture.

The first Build fund received $15 million from both Nova Scotia and New Brunswick, as well as contributions from Newfoundland and Labrador, Prince Edward Island, BDC, Technology Venture Corp. and a few private investors.

Barbara said he and Keefe were pleased to receive money from VCCI, which was set up to distribute federal money to VC funds to help spur innovation. It received the money as an “alternative” venture capital fund, meaning a funding group that may not have the scale or track record of some of the larger Canadian funds.

He said the VCCI money is “going to be a critical piece of us being successful and closing this fund.”


Disclosure: Build Ventures is a client of Entrevestor.