Aimed at companies that develop solutions to global challenges in areas of health, wellness, sustainability
Ottawa—Export Development Canada (EDC) has committed to $7.5-million in funding for a venture capital fund investing in innovative food and agricultural companies.
The cash will go to Avrio Ventures Ltd., Partnership II (Avrio II), which provides funding to companies that develop solutions to global challenges in the areas of health, wellness and sustainability.
The Avrio II fund will target Canadian companies operating in lucrative and niche sub-sectors like advanced agriculture, industrial bio-products, agricultural biotechnology, natural and organic consumer packaged goods, renewable ingredients, food safety and functional foods.
“EDC believes in the potential of Canada’s food agriculture sector, including advanced agriculture, organic foods, nutraceuticals and functional foods,” EDC lead investment manager Alison Nankivell said in a statement. “We recognize the competitive advantages Canadian companies have in the space and see many applications in high growth emerging markets.
EDC participated in Avrio I in 2006 through a $6-million investment.
According to EDC, its investments program focuses on small- and mid-sized companies looking to grow their business by going global; and “next-generation” exporters—those technology companies that were born global by virtue of their product, but need capital and assistance to develop and garner international success.
Both groups face gaps in financing, networking and experience, according to EDC.
EDC’s participation as a partner in equity fund structures, managed by experienced commercial players, helps bridge those gaps.
As of Dec. 31, 2011, investments over the life of the EDC equity program have reached a total of $694-millon in commitments, including $320-million committed to next-generation exporters; $120-million of commitments to mid-market exporters; and $254-million of commitments focused on connecting with emerging markets.