EDC commits CAD 7.5 M to venture capital fund for Canadian food and agricultural companies
OTTAWA, July 26, 2012 /CNW/ - Export Development Canada (EDC) today announced its commitment to invest up to CAD 7.5 million in Avrio Ventures Limited Partnership II (Avrio II), a venture capital fund investing in innovative food and agricultural companies that provide 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 subsectors 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. We recognize the competitive advantages Canadian companies have in the space and see many applications in high growth emerging markets," said Alison Nankivell, Lead Investment Manager, Investments, EDC.
EDC was a participant in Avrio I in 2006, with an investment of CAD 6 million.
"Avrio and EDC have been working together to open international markets for their portfolio companies through targeted introductions within EDC's relationships with major foreign multinational companies," said Justine Hendricks, Vice-President, Light Manufacturing and Resources, EDC.
"Over the first five years of the first fund, Avrio was able to grow the portfolio's exports from under CAD 10 million per year to CAD 50 million a year, a 400 per cent increase. That's a huge boon for the bottom lines of the fund's companies and helps improve Canada's trade performance."
EDC's Investments Program focuses on two groups of companies: small- and mid-sized companies that want 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. EDC's participation as a partner in equity fund structures, managed by experienced commercial players, helps bridge those gaps.
As of December 31, 2011, investments over the life of the EDC Equity Program have reached a total of CAD 694 million in commitments, including CAD 320 million of commitments to next-generation exporters; CAD 120 million of commitments to mid-market exporters; and CAD 254 million of commitments focused on connecting with emerging markets.
EDC is Canada's export credit agency, offering innovative commercial solutions to help Canadian exporters and investors expand their international business. EDC's knowledge and partnerships are used by more than 7,700 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining and a recognized leader in financial reporting and economic analysis.
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