The New Brunswick Innovation Foundation invested $4.98 million in equity funding for the province's startups in its 2021-2022 fiscal year, in what it said was a record fundraising year for its portfolio companies.

NBIF’s venture capital investments accounted for almost exactly a third of its total $14.3 million of spending, according to the organization’s 2022 Impact Report. Another $7.4 million went to applied research funding, which can lead to future commercialization activity, and for the first time this year, focused on three specific topics: climate change, artificial intelligence and adult literacy.

The fund, which now has 67 active portfolio companies compared to 60 a year earlier, estimates that New Brunswick startups raised $118 million of equity funding for the fiscal year that ended March 31. During that period, Fredericton- and Miami-based Introhive also raised a US$100 million Series C funding round.

“If you’ve ever watched the Fundy tidal bore come up the Peticodiac River, then you have a sense of what FY22 was like for us at NBIF,” says the organization in its report. “Over the course of the year, we have invested $5 million into 29 New Brunswick companies, and those companies secured another $86 million in private sector investment.

“With many seasoned founders in our network, we’re now experiencing a self-feeding cycle of venture capital investment.”

By a self-feeding cycle, NBIF is referring to the mentorship and networking from experienced entrepreneurs that can help with accessing funding. For example, NBIF said Fredericton electrical vehicle startup Potential Motors has tapped mentorship by former Radian 6 executives to help raise funding.

NBIF has dual functions: it invests in and nurtures early-stage innovation companies, and it helps finance research that can help New Brunswick ventures. The early-stage investments partly fill a gap in the province’s innovation ecosystem left by a dearth of angel investors, who usually write checks of a similar size to NBIF’s typical six-figure deals.

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The organization has two main equity funding programs for startups, its Start-up Investment Fund and its Venture Capital Fund. The Start-up investment fund makes pre-seed investments and the Venture Capital Fund makes seed-stage deals.

The total investment of $4.98 million represents a reversal from a prior slide that saw $4.35 million invested in 2020-2021, down from $5.2 million the year before.

More than half of NBIF’s portfolio companies are either information technology, cybersecurity or agtech startups.

NBIF also runs an Innovation Voucher Fund, which offers small and medium-sized enterprises working with research institutions grants to pay for facilities or personnel. The organization spent just over $1 million on that program this year, backing companies like Fredericton food technology specialist Chinova Bioworks to the tune of $35,000 and Moncton cancer treatment startup Soricimed Biopharma at $79,000. In total, 15 companies received Innovation Voucher funding.

The impact report adds that lucrative exits are continuing to become more common for New Brunswick startups, replenishing financial resources within the ecosystem. 

Here’s a look at NBIF’s Venture Capital Fund investments in the 2020-21 fiscal year:

And here are the Start-up Investment Fund deals for the same period:

In addition to its two main funding vehicles, NBIF also makes investments of $25,000 to $50,000 to certain graduates of approved accelerators, like Propel and Energia Ventures. In 2021-2022, the organization invested $300,000 in eight of these companies.