The New Brunswick Innovation Foundation has unveiled a $20 million venture capital initiative to increase the amount of money available to scaling companies.
CEO Jeff White made the announcement during the InnovateNB Awards ceremony on Tuesday evening, saying it will help companies grow and produce benefits for the entire province.
He said the new strategy will be implemented over 10 years and includes a plan for the Fredericton-based non-profit organization to set up a Series A fund to back companies in the province and region.
“What we ideally want to do is to develop a larger pool of capital for our founders,” said White. “If we can make it easier for (them) and cut down on the resistance on even a handful of entrepreneurs, it’s going to benefit our province.”
The New Brunswick government established NBIF about two decades ago as an arm’s-length non-profit organization that would receive public funding to support industrial research and to finance early-stage ventures with venture capital. The organization now makes about $4 million to $6 million a year in direct VC investments, which will continue as part of the core programming. The initiatives announced Tuesday will complement the core programming, and be financed from the $28 million the group has earned from exits in the past two decades.
The new investment strategy will comprise three components, the finer details of which will be worked out in the next few years:
- NBIF plans to become a limited partner for at least one Series A fund, likely based outside the province, that specializes in a key sector in New Brunswick’s economic strategy. White said possible sectors that could be the focus of the strategy could be cybersecurity, digital health or artificial intelligence.
- NBIF plans to expand its accelerator strategy to back New Brunswick companies that graduate from recognized accelerators. The foundation currently invests in certain graduates of programs such as Propel and Energia Ventures. Increasing support for graduates could include supporting companies that go through accelerators based outside Atlantic Canada.
- The foundation would like to set up its own Series A fund that would draw on funding from NBIF and from other limited partners from New Brunswick and elsewhere. The fund – which NBIF hopes will be worth about $40 million to $60 million – would likely invest in companies based in New Brunswick and elsewhere, assuming it would include LPs based outside the province.
White said the strategy could draw about $500 million to $600 million of private sector investment into the province.
He spoke shortly after Premier Blaine Higgs took the stage and voiced a continued commitment to NBIF and the innovation community in general. “I am convinced that without innovation, we won’t be able to meet the big challenges we face,” said Higgs.
NBIF Chair Cathy Simpson, one of the hosts of the InnovateNB Awards, later reminded Higgs that NBIF and its board had heard him voice his support for the organization and would hold him to it.
NBIF has backed 70 startups, and they now employ a total of 1,300 people and generate $70 million in annual revenue. As well as investments from NBIF, they have attracted $350 million in equity capital.