TORONTO, - Today, Black Innovation Capital (BIC) and BDC Capital announced the launch of the $10M Black Innovation Fund, with an initial close of $6.4M. The fund is focused on investing in Canadian pre-seed and seed stage technology companies founded by Black entrepreneurs. Other investors in the first close include RBC Ventures, Globalive Capital, and TELUS Ventures.
"Black entrepreneurs are underfunded and underrepresented in the North American venture capital and private equity markets," says Isaac Olowolafe Jr., Founder and Managing Partner, BIC. "Unfortunately, this information is not tracked in Canada, but we know the situation is critical. Our goal is to raise $10 million dollars to help Black-founded tech companies thrive and we are thrilled to work with an experienced institutional investor like BDC Capital to help us reach that goal."
Last year in the US, less than 1% of total funding in venture capital investment in the US went to Black start-up founders. The funding available to Black women entrepreneurs is even lower when you consider that only 11% of all venture capital investments in the US went to teams with a female founder.
"We know access to capital is one of biggest challenges facing Black entrepreneurs and BDC is committed to leading by example to ensure our start-up and investment landscape is diverse and inclusive," said Jérôme Nycz, Executive Vice President, BDC Capital. "This fund addresses two important gaps in the market: funding and role models. Working together, we can help Black-led start-ups scale and inspire future founders and investors."
Diversity in investment teams is still a big gap in Canada. According to a 2019 CVCA study, only 18% of partners at venture capital firms were "visible minorities," and that number dropped to 6% in private equity.
As Canada's development bank and largest venture capital investor, BDC helps entrepreneurs by providing the access to capital and resources they need to succeed. BDC Capital is home to the $200M Women in Technology Venture Fund, is a founding signatory of ILPA's Diversity in Action Initiative, and works alongside the CVCA and ILPA to play a leading role in setting diversity and inclusion best practises for the industry.
"Unconscious bias exists everywhere, including in investing," says Lise Birikundavyi, Principal/Fund Manager for BIC. "People typically invest in individuals and concepts they are familiar with, not always based on their values, experience or a sound business case. Our hope is to help build successful Black-led businesses, deliver returns to our investors, and increase the diversity in the venture capital ecosystem."
Black Innovation Capital is being established as a result of the need uncovered through the strategic collaboration between Dream Maker Ventures, also founded by Isaac Olowolafe Jr., and the DMZ at Ryerson University. They jointly launched the Black Innovation Programs (BIP) in 2019 to support Black-owned start-ups and entrepreneurs through DMZ's BIP Launchpad, Bootcamp and Incubation programs.
This announcement also builds on a series of recent BDC initiatives to support Black entrepreneurs including the Black Entrepreneurs Startup Program with Futurpreneur, a free webinar series, the Canadian Black Chambers of Commerce's first study, Building Black Businesses in Canada, among other internal initiatives to improve inclusivity such as anti-racist workplace training.