CDPQ and its Partners Back BKR Capital in Quebec

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Jean Dondo of Wealth Professional reports BKR Capital opens Montreal office:

BKR Capital, a Canadian venture capital fund previously known as Black Innovation Capital, has announced the opening of its Québec office.

The first VC fund in Canada dedicated to black-led firms said it has received a $4.5-million capital commitment from Caisse de dépôt et placement du Québec (CDPQ), through Teralys Capital, and Fondaction. Investors such as EDC, Westbridge, Vancity, and the Laidlaw Foundation, among others, joined current institutional investors BDC Capital, RBC, Globalive, and Telus Ventures to raise the extra capital.

BKR Capital, which already has headquarters in Ontario, will open offices in Montréal at CDPQ's Espace CDPQ, a venture capital hub.

"BKR Capital offers concrete solutions to a real challenge faced by Black entrepreneurs, which is obtaining financing to start and grow their businesses," Wils Theagene, Senior Director, Equity 25 at CDPQ, said. "As investors, we are proud to support the mission of BKR Capital through our commitment to Teralys Capital, to whom we have entrusted the fund management mandate for emerging fund managers."

The fund, which began investing in pre-seed and seed-stage Canadian technology firms formed by Black entrepreneurs in 2021, has a unique flow of business because of its collaborations with the DMZ's Black Innovation Program, the HEC Montréal Entrepreneurial Base, and its strong linkages to Black communities across Canada.

BKR Capital aims to serve as a catalyst for technology-related entrepreneurial activities in Black communities, notably those in Québec, which account for approximately a third of Canada's total Black population.

"With the funds, we plan to support 18 innovative companies over the next four years and help create the next Canadian success stories. Our objective is to capitalize on high-potential opportunities, primarily ignored by the main market players," Lise Birikundavyi, Co-founder and Principal of BKR Capital, explained.

BKR Capital also invested in GOODEE, a B Corp certified online retailer specializing in furniture and accessories, lifestyle items, and sustainable design situated in Québec.

GOODEE is an avant-garde platform that combines the concepts of excellent design, good people, and good purpose. It was founded in June 2019 by designers Byron and Dexter Peart.

The company is first and foremost a digital marketplace that addresses a number of pressing social and environmental concerns, including poverty reduction, gender equality, and climate change mitigation. It is inspired by the United Nations' 17 Sustainable Development Goals.

"As Black entrepreneurs, we understand the importance and opportunity offered by the role we play in reshaping the narrative and representation of what a good company is," Dexter Peart, Co-Ceo and Co-Founder of GOODEE, said, "We are inspired by the strength of BKR Capital's commitment to supporting the positive impact and innovation in growing companies, and we are very honored to be their first investment in Québec."

Yesterday, CDPQ announced that BKR Capital, the first Canadian venture capital fund dedicated to black-led businesses, has set up an office in Montreal:

BKR Capital (formerly known as Black Innovation Capital), announced it is opening an office in Québec. Caisse de dépôt et placement du Québec (CDPQ), through Teralys Capital, and Fondaction will commit $4.5 million to this first Canadian venture capital fund dedicated to black-led businesses. These additional funds were raised by investors such as EDC, Westbridge, Vancity and Laidlaw Foundation, among others, who joined existing institutional investors BDC Capital, RBC, Globalive and Telus Ventures.Already present in Ontario, BKR Capital will open offices in Montréal at Espace CDPQ, a venture capital hub created by CDPQ.

“BKR Capital offers concrete solutions to a real challenge faced by Black entrepreneurs, which is obtaining financing to start and grow their businesses,” said Wils Theagene, Senior Director, Equity 253 at CDPQ. “As investors, we are proud to support the mission of BKR Capital through our commitment to Teralys Capital, to whom we have entrusted the fund management mandate for emerging fund managers.”

Launched in 2021, the fund aims to invest in pre-seed and seed-stage Canadian technology companies founded by Black entrepreneurs. BKR Capital benefits from a differentiated flow of business, notably through partnerships with the DMZ’s Black Innovation Program, the HEC Montréal Entrepreneurial Base and the close ties it maintains with Black communities across Canada. BKR Capital intends to act as a catalyst for entrepreneurial initiatives in technology within Black communities, including those in Québec, which represent nearly 30% of the total Black population of Canada.

“With the funds, we plan to support 18 innovative companies over the next four years and help create the next Canadian success stories.  Our objective is to capitalize on high-potential opportunities, primarily ignored by the main market players,” explained Lise Birikundavyi, Co-founder and Principal of BKR Capital. “Québec is full of talented entrepreneurs from our communities who are managing to move forward despite the disparity of opportunities. We are thrilled to have the support of institutions such as CDPQ, Teralys Capital and Fondaction, investors who share our vision that a more inclusive business universe ultimately benefits everyone.”

“Our participation in BKR Capital is part of our commitment to a more inclusive economy. With the network of technology industry leaders and investors committed to providing advice and mentorship to the fund and the values of diversity and inclusion that drive it, this first national initiative of its kind has the potential to positively change the financial ecosystem that brings together technology companies in the country,” said Marc-André Binette, Deputy Chief Investment Officer at Fondaction.

First investment in a Québec company

BKR Capital also announced an investment in GOODEE, a Québec-based B Corp certified online retailer specialized in furniture and accessories, lifestyle products and sustainable design.

Founded in June 2019 by designers Byron and Dexter Peart, GOODEE is an avant-garde platform that brings together the values of good design, good people and good purpose. Inspired by the UN’s 17 sustainable development goals, GOODEE is first and foremost a digital marketplace that provides a solution to several urgent social and environmental issues such as reducing poverty, gender equality and the fight against climate change.

“As Black entrepreneurs, we understand the importance and opportunity offered by the role we play in reshaping the narrative and representation of what a good company is,” stated Dexter Peart, Co-Ceo and Co-Founder of GOODEE. “We are inspired by the strength of BKR Capital’s commitment to supporting the positive impact and innovation in growing companies, and we are very honoured to be their first investment in Québec.”

ABOUT BKR CAPITAL

BKR Capital (formally Black Innovation Capital) manages the first venture capital fund dedicated to black-led businesses in Canada. The $20M fund focuses on pre-seed and seed investments in technology and technology-enabled ventures with the objective of providing transformational capital to disruptive enterprises often answering unmet needs from minority communities. It aims to unlock hidden financial value and opportunities through the creation of a more inclusive business ecosystem. For more information about BKR Capital, visit our website, follow us on Twitter or consult our Instagram or LinkedIn pages.

ABOUT CDPQ

At Caisse de dépôt et placement du Québec (CDPQ), we invest constructively to generate sustainable returns over the long term. As a global investment group managing funds for public retirement and insurance plans, we work alongside our partners to build enterprises that drive performance and progress. We are active in the major financial markets, private equity, infrastructure, real estate and private debt. As at June 30, 2021, CDPQ’s net assets totalled CAD 390 billion. CDPQ has also created Equity 253, an investment fund that will deploy $250 million over four years to increase diversity and inclusion in companies in Québec and Canada. For more information, visit cdpq.com, follow us on Twitter or consult our Facebook or LinkedIn pages.

About Teralys Capital

Teralys Capital is a private fund manager financing private venture capital funds investing in information technologies, life sciences, and clean or industrial innovations. Our partner funds cover the entire investment spectrum from early stage start-ups to expansion, growth and technology buy-outs. With $2B in assets under management across 3 recent venture capital fund of funds and 2 additional legacy portfolios of funds, Teralys is the largest innovation-focused investor in Canada. For more information visit the website www.teralyscapital.com.

ABOUT FONDACTION

A forerunner in sustainable finance for the past 25 years, Fondaction brings together individuals that are mobilizing for the positive transformation of society, taking action to make Québec’s economy more equitable, inclusive, green and successful. As a labour-sponsored fund, Fondaction represents tens of thousands of savers and hundreds of companies committed to helping Québec progress.  It manages net assets of more than $2.96 billion invested in hundreds of businesses and in financial markets, prioritizing investments that generate positive economic, social and environmental impacts in addition to a financial return. Fondaction helps create and maintain quality jobs, reduce inequalities and fight climate change.  For more information, go to fondaction.com or our LinkedIn page.

ABOUT GOODEE

In 2017, designers and entrepreneurs Byron and Dexter Peart embarked on a new mission. After founding the acclaimed brand WANT Les Essentiels in 2007, the twin brothers set out on a new venture to launch and develop meaningful brands dedicated to offering sustainable solutions for modern living. This time, however, the pair decided to work exclusively with artisans and products that make a positive social or environmental impact. Introduced in summer 2019, GOODEE is a Certified B Corporation that leads the way toward a market that brings together the values of good design and good purpose. With a fast-growing team based in Montréal, Byron and Dexter serve as the principal curators for the global online retail platform, which also includes numerous inspiring stories. In 2020, GOODEE joined 1% For The Planet, whose members contribute at least 1% of their annual sales to environmental causes and was notably a finalist for Fast Company’s 2020 World Changing Ideas Awards, in the Art and Design category. In addition, GOODEE was named one of Fast Company’s 2021 World’s Most Innovative Companies. www.goodeeworld.com

The first thing I did after reading this press release was to read more about BKR Capital:

At BKR Capital, we want funding to be more accessible to innovative companies led by black teams to build wealth for our community and enrich the venture capital space. Our vision is to create a business ecosystem that is more inclusive, from a portfolio perspective - through a wider number of black-led companies receiving catalytic funding, and from an investors perspective - through a wider number of young black professionals trained to become investment managers.

BKR Capital was built with the objective of investing in promising black founders in the technology space. We make early and transformational investments in disruptive companies often answering unmet needs of minority communities. We are intentional about our investment strategy and look to partner only where we can add value, with hard-working and visionary entrepreneurs.

START-UPS WE LOOK FOR

BKR Capital looks to invest in companies that are inclusive of these factors and/or criteria

  • Technology and technology-enabled start-ups 
  • A strong team of black founder(s) 
  • Product/market fit with a large addressable market 
  • Pre-Seed to Seed stage investments Based in Canada (10% of our portfolio companies will be based globally)

The second thing I did was read more about BKR Capital's founder, Lise Birikundavyi who was featured with her managing director, Issac Olowolafe Jr (see picture above) in this Métro Média article which I translate from French:

By co-managing the Black Innovation Fund (now called BKR Capital), Lise Birikundavyi becomes the first black woman to head a venture capital fund backed by an institutional investor in Canada. An important accomplishment for this former Pointellière who wishes above all to create success stories within the black entrepreneurial community.

Black Innovation Capital (BIC), created in 2021, recently launched the Black Innovation Fund in partnership with BDC Capital. This $10 million fund is intended for Canadian technology companies in the pre-seed and seed stages, founded by black entrepreneurs.

With this fund, Lise Birikundavyi, director and fund manager for BIC, and her partner Isaac Olowolafe Jr. want to “create success stories” in a community that, despite its talent, often seems to benefit from fewer opportunities.

"I speak with entrepreneurs who are super promising, but who have trouble raising the necessary funds," she says. If several black entrepreneurs succeed in being creative to raise funds, others would suffer from “unconscious biases” towards minorities.

This project is also motivated by the certainty of Ms. Birikundavyi that the empowerment of communities requires private investment. A conviction that the Torontonian has developed over her last ten years in the field of investment. After living in China, Ghana and Côte d'Ivoire, where she has invested, she notices that young shoots "are vectors of wealth".

A first

By co-managing this fund, Lise Birikundavyi becomes the first black woman to manage a venture capital fund supported by an institutional investor in Canada.

If she does not define herself as a model, she recognizes that the world of finance is still an environment where the place of women remains to be made. “I see women with quite extraordinary backgrounds. But I still think sometimes it's unconscious biases, you don't see what's different about you. And that is the power of diversity.”

With great momentum, the one who cut her teeth at Saint-Marcel and Daniel-Johnson school and at the Polyvalente de Pointe-aux-Trembles says she hasn't forgotten the neighborhood that saw her grow up. She also claims to feel “at home” every time she returns.

“It always brings back memories when I go there with my kids."

So, the Black Innovation Fund now called BKR Capital partnered up with BDC Capital which I know well to launch its initial fund.

Ms. Birikundavyi is obviously very passionate about BKR Capital's mission and she has to be impressive to raise this type of capital in a couple of years.

What do I think of BKR Capital and the announcement that CDPQ is backing it up through its Equity 253, an investment fund that will deploy $250 million over four years to increase diversity and inclusion in companies in Québec and Canada?

Well, I'm a stickler for diversity but I want to make one thing clear, this isn't a charity fund with a social purpose, it's a serious venture capital fund that is looking to seed great start-ups and promote diversity and inclusion.

In the press release, Wils Theagene, Senior Director, Equity 253 at CDPQ, states this:

BKR Capital offers concrete solutions to a real challenge faced by Black entrepreneurs, which is obtaining financing to start and grow their businesses. As investors, we are proud to support the mission of BKR Capital through our commitment to Teralys Capital, to whom we have entrusted the fund management mandate for emerging fund managers.”

Notice that Teralsys Capital is entrusted to find emerging fund managers and they are "committed to support and encourage outstanding technology entrepreneurs to innovate, grow and bring game changing ideas to the global marketplace."

The key thing here is to recognize that there are smart black entrepreneurs who are very much worth investing in but for one reason or another, they are unable to secure financing for their innovative start-ups.

This is where BKR Capital comes in to find these companies, evaluate them, seed them, lend them capital and provide advisory and other expertise to help them grow their business.

The focus is on technology or technology-enabled start-ups with Black founders based in Canada, although 10% will be based globally which is interesting. 

Through its collaborations with the DMZ's Black Innovation Program, the HEC Montréal Entrepreneurial Base, and its strong linkages to Black communities across Canada, BKR Canada is looking for the best and brightest in these communities to help fund their start-ups.

If successful, they will empower the next generation of Black entrepreneurs and help a community which has historically been underrepresented in the venture capital space. 

By the way, the United States is leading the way to fund Black talent looking to grow their start-ups but even there, they're behind the curve:

What is driving this movement? No doubt, in the midst of the pandemic, we saw the BLM movement further emboldened from the tragedies of George Floyd, Ahmaud Arbery and Breonna Taylor, highlighting the ongoing racism Black communities face across the United States.

But I also think Wall Street is realizing there are enormous profits to be made here which is why well-known private equity and venture capital firms are increasingly taking diversity and inclusion very seriously.

Lastly, I realize the money involved here is a pittance compared to CDPQ's giant portfolio but it sends a strong message that the organization takes diversity and inclusion very seriously:

It also sends an important message to CDPQ's employees which are increasingly multicultural that all communities matter in Quebec.

Below, a great discussion on what investors want featuring Lise Birikundavyi. Listen to her background and insights, she's a very impressive young lady who speaks very eloquently.

Second, Michael Denham, former President & CEO of BDC, Canada’s first B Corp bank, talks about the entrepreneurs who redefine business success, and the certification they love, on August 2018.

Third, a year ago, CNBC's "Squawk Alley" was joined by Jarrid Tingle of Harlem Capital to discuss how it  received $10 million as part of Apple's diversity push.

Lastly, it's Black History Month and for me, that means learning about celebrating excellence and achievement in Canada and also learning about people who made an important difference in their community here and elsewhere.

Yesterday morning, I enjoyed watching ‘GMA’ surprise civil rights pioneer Annie Abrams with a street sign named after her. Abrams, a civil rights pioneer in Little Rock, Arkansas, was among the mentors giving the "Little Rock Nine" the courage to make history. 

What an incredible lady who deserves to be recognized for all her achievements.

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