BDC Capital Launches $200 Million Deep Tech Fund

By Bruce Harpham Wednesday, May 12, 2021

BDC Capital has launched a $200 million deep tech venture investing fund. The investing fund will focus on AI, quantum computing, electronics, and other technology fields. The investing fund is planning to offer both series A and seed company funding to startup business owners. The $200 million investing fund represents a shift in strategy for BDC, which has provided loans to Canadian business owners since 1944. As of May 2021, the company has provided $36 billion CAD ($29 billion USD) to small and medium-size business clients. As a Crown company, BDC Capital is ultimately owned by the Canadian government.

A dollar sign next to a computer circuit board.

The Quantum Technology Business

Quantum computing is one area of focus for the BDC Capital deep tech investing fund. It is a growing business segment drawing interest from the likes of IBM, Honeywell, and many startup business owners.

In Canada, the quantum technology business is growing. Last year, more than 20 business leaders came together to form Quantum Industry Canada, a business association. Significant business members include 1QBit (a quantum computing software company) and Adaptive Finance Technologies (an AI fintech company exploring quantum technology).

Compared to well-established business segments like AI, quantum technology is a smaller business segment. Research and Markets, a market research company, estimated that the global quantum computing market would be worth $472 million in 2021, with the potential to grow to $1.7 billion by 2026.

Deep Tech Investing Grows

The BDC Capital has a focus on deep tech. The term deep tech refers to a company focused on making fundamental engineering or technology innovations rather than incremental improvements.

“BDC Capital has helped establish a robust and thriving venture capital market in Canadian tech. The Deep Tech Venture Fund will continue to build on that by providing critical risk capital to promising start-ups so they can scale up their operations, expand to global markets and create good jobs, contributing to Canada’s recovery from the COVID-19 pandemic and to long-term growth,” said Mary Ng, Minister of Small Business, Export Promotion and International Trade and the Minister responsible for BDC.

According to Boston Consulting Group, a management consulting company, investing in deep tech has increased from $9 billion in 2015 to $17 billion in 2018. The company found that 53% of deep tech startup business owners (i.e., over 4,000 companies) are based in the United States (US). The consulting company points out that China has more than 700 deep tech startup companies. In Europe, there were 455 in Germany, 435 in the United Kingdom (UK), and 241 in France. Meanwhile, Canada had 312 deep tech businesses as of 2018.

Government Support for Startup Business Owners

As a government-owned entity, the BDC Capital deep tech investing fund is part of a global business trend to invest in new business models and technologies. In Hong Kong, the government has adopted a policy to invest in a few business areas such as AI, robotics, and fintech via an Innovation and Technology Venture Fund. The fund started with $2 billion HKD ($257 million USD). Meanwhile, the United Arab Emirates (UAE) is encouraging business growth through investing in a partnership with Microsoft. Saudi Arabia has started a Riyadh Techstars Accelerator, a business program to help startup founders expand.

About the Author


Headshot for author Bruce Harpham

Bruce Harpham is an author and marketing consultant based in Canada. His first book "Project Managers At Work" shared real-world success lessons from NASA, Google, and other organizations. His articles have been published in CIO.com, InfoWorld, Canadian Business, and other organizations. Visit BruceHarpham.com for articles, interviews with tech leaders, and updates on future books.

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