BDC Capital's longstanding convertible notes program has undoubtedly been a boon to Canada's startup ecosystem: the through the program, the firm has invested a total of $11 million into more than 70 budding companies.
Now, through a partnership with health sciences accelerator Accel-Rx, BDC Capital is expanding its popular convertible notes program to Canada's health sector. A $10 million total investment, BDC Capital plans to offer $500,000 convertible notes to up to four companies for year, totalling 20 companies over a five-year agreement with Accel-Rx.
“The fact is: the healthcare industry in Canada holds great promise, with over $6 billion invested in basic research annually," says Jérôme Nycz, Executive Vice President, Subordinate Financing and Venture Capital at BDC. "However, a gap exists in terms of transforming this research into commercially-viable businesses."
The convertible note size at half a million dollars is more than triple that IT startups have enjoyed under the original program; a rep from BDC Capital says this is because of the nature of healthtech startups, which don't benefit from the same lean scaling as internet companies.
BDC Capital has been investing in healthtech for a long time. Through their Healthcare Venture Fund, BDC Capital has committed more than $270 million in direct investments in the life sciences sector. The firm has also invested in more than 35 active funds that touch the sector.
Accel-Rx is a new national initiative focused on maximizing the creation of new health sciences companies. It was shortlisted as a potential CAIP funding recipient, announced last week by PM Harper.
"Accel-Rx will provide Canada with a more well-informed, well-resourced, and effective approach to company creation," suggests Natalie Dakers, Centre Director of Accel-Rx, "and ensure that opportunities arising from the country’s strong foundation of innovative discovery research and technology development are fully capitalized on through the launching of a critical mass of robust companies based on exceptional innovative, pre-validated (scientifically and commercially) technologies.”
Accel-Rx brings together five of Canada’s health sciences Centres of Excellence for Commercialization and Research to "foster cross-Canadian cooperation": the Centre for Drug Research and Development; MaRS Innovation; the Vancouver Prostate Centre's Translational Research Initiative for Accelerated Discovery and Development; the Centre for Commercialization of Regenerative Medicine; and the Centre for Probe Development and Commercialization.
"Creating companies around these most promising early-stage technologies allows for investment and is a crucial step in advancing them to market," notes said Dr. Raphael Hofstein, MI’s President and CEO. "This collaboration between Accel-Rx and BDC Venture Capital will provide new opportunities to address seed-stage funding rounds for health sciences companies prior to Series A financings or other strategic alliances."