Crown corporations Nova Scotia Business Inc. and Innovacorp are being amalgamated into a single agency called Invest Nova Scotia, as Tim Houston’s Progressive Conservative government looks to streamline operations, the province announced Tuesday.
Both legacy organizations offer programs that support startups. NSBI is the provincial economic development agency, whose services include the Export Development Program and the Scale-Up Hubs in Atlanta and Cambridge, Mass. Innovacorp is a venture capital fund with a portfolio heavy on deep tech investments, and also provides incubation space and non-dilutive funding for early-stage startups.
In a statement, the province said the goal of the consolidation is to "address issues of overlapping mandates, duplicate operations, outdated legislation and arm’s-length boards making decisions involving millions of dollars in taxpayers’ money.”
The province has named Tom Hickey, CEO of paving company Atlantic Road Construction as Invest Nova Scotia’s executive chair — a newly created role that will replace the boards and CEOs of both Innovacorp and NSBI during the transition. An advisory board will also be created, although its membership has not been announced.
A native of Cape Breton, Hickey is a long-time investor and has backed such Halifax-area companies as Bright (formerly Cribcut). He is an investor in the 7th Wave Investment Fund.
“I’m excited to help government focus on economic development and efficiencies by working with the teams at Invest Nova Scotia,” said Hickey. “With that focus, I think I have something to offer."
For more than seven years, NSBI has been led by CEO Laurel Broten, whose previous jobs included serving as Minister of Education in Ontario. Innovacorp's current CEO is Malcolm Fraser, who sold his digital agency ISL Internet Services to Vancouver-based digital marketing agency FCV Interactive in 2016.
In a December interview, Fraser said that since 2010, Innovacorp has invested $62 million in 89 companies and received $111 million in returns from exits including advanced materials-maker Meta Materials and sales software startup Leadsift, among others. At the time, the fund was valued at $82 million, even after $101 million from the Meta exit was controversially moved to provincial coffers.
Fraser, who has helmed Innovacorp since 2017, was set to have his first five-year term as CEO expire in September.
A spokesperson for the province did not immediately reply to a request for comment about whether Invest Nova Scotia will continue doing venture capital deals. NSBI’s roughly $45 million of annual government funding and Innovacorp’s $10 million will be combined, but not immediately cut. Documents published by the provincial government say the new organization's mandate will include "venture capital and investment attraction."
Disclosure: Innovacorip is a client of Entrevestor.