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TORONTO, Nov 18 (Reuters) - The second Canadian government-backed investment fund set up to breathe life into the country's venture capital industry raised C$160 million ($141.6 million) on its initial closing, its backers said on Tuesday.
The fund is the latest step in the government's action plan to spur funding of Canadian start-ups in such sectors as digital media, information technology, cleantech and telecommunications.
In early 2013, the government said it would invest C$400 million in new capital over seven to 10 years in its Venture Capital Action Plan to match and attract further private-sector funding of start-ups.
In January, the first such fund, Northleaf Venture Catalyst, raised C$217.5 million from institutional and corporate backers, including some of Canada's biggest banks, as well as the federal and Ontario governments.
The second fund dubbed the Kensington Venture Fund, is being run by Toronto-based Kensington Capital Partners
"By giving Canadian technology companies the ability to grow and thrive at home, this Fund will help stem the gravitational pull that is driving so many of Canada's leading entrepreneurs, engineers and (others) to Silicon Valley," said Rick Nathan, managing director, Kensington Capital Partners, in a statement.
The government's stake in the Kensington Venture Fund is 33 percent, so the majority of the investment will come from the private sector, Kensington said.
The private sector backers currently include Richardson GMP, OpenText Corp, Royal Bank of Canada, BMO Financial Group, CIBC, TD Bank Group, and Scotiabank as well as individual investors, alongside the government of Canada. The fund will remain open to new accredited and institutional investors until it reaches its maximum size of C$300 million.
Kensington said it sees opportunities in the underserved markets of Western Canada, especially in energy technologies and cleantech, as well as information technology, telecommunications and digital media.
$1 = $1.1299 Canadian Reporting by Euan Rocha Editing by W Simon