UPDATE 1-Canadian public-private venture capital fund raises C$160 million

Tue Nov 18, 2014 3:02pm EST
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(Adds comment from Kensington Capital)

By Euan Rocha and Alastair Sharp

TORONTO Nov 18 (Reuters) - The latest of several Canadian government-backed investment funds that are being 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 government said in early 2013 it would invest C$400 million in several new funds over seven to 10 years through its Venture Capital Action Plan to match and attract private-sector funding for Canadian startups.

It wants the funds to spur investment in such sectors as digital media, information technology, cleantech and telecommunications. Each fund can make investments in any startups in those sectors.

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 latest fund, dubbed the Kensington Venture Fund, is being run by Toronto-based Kensington Capital Partners.

Rick Nathan, managing director of Kensington Capital, said that by giving Canadian technology companies the ability to grow and thrive at home, the fund will help stem the pull that is driving many of Canada's leading entrepreneurs, engineers and others to the tech hub of Silicon Valley.

"There is this massive gravitational force in Silicon Valley that draws entrepreneurs to sell their companies there," Nathan said in an interview. "There's lots of reasons for it, but one of the big reasons for it is the access to capital. There has not been enough risk capital in the Canadian market for technology."   Continued...