The Toronto-based investment firm Kensington Capital Partners is well aware of the optics of being handpicked to lead the B.C. government’s $100 million Tech Fund.
Managing director Richard Nathan noted Kensington has previously invested $100 million in B.C. companies outside of the fund. The announcement was made official October 21 at Telus Gardens after months of speculation.
“It’s important to point out that even though I live in Toronto and Kensington’s head office is in Toronto, we are here a lot, and have been,” said Nathan. “I’m not at all concerned about the ability to demonstrate that we’re part of this community because we already are.”
First announced by Christy Clark last December, the BC Tech Fund went through a 10-month selection process and Kensington beat out two B.C.-based entities. Amrik Virk, the Minister of Technology, Innovation and Citizens’ Services, acknowledged the larger issue at hand concerning B.C.’s growing tech sector, that venture capital is hard to come by.
“In 2014, when I took the portfolio over, you gave me a homework assignment,” said Virk, addressing B.C.’s tech sector members in the audience. “You said the number one challenge was venture capital.”
Virk stressed that the government will have no involvement in decision making when it comes to the BC Tech Fund and that Kensington will have “full responsibility.”
“We want to keep politics out of this,” he added.
A recent Brookfield Institute for Innovation + Entrepreneurship study ranked Vancouver third in terms of overall technology employees behind Toronto (286,100) and Montreal (222,200), however many within the industry say finding capital to grow businesses beyond incubation stages is still tough and that Vancouver remains largely known as a resource town.
Gerry Sinclair, who becomes the managing director of the Vancouver office, said the move has been on Kensington’s wish list for a while.
“We’re hiring two more professionals which means we’re going to be visibly and actively involved in the community,” said Sinclair. “Kensington has wanted to expand to Vancouver for a long time so this is not just an opportunistic move.”
Both Nathan and Sinclair acknowledged two overlying issues facing the Vancouver tech sector: the unaffordability of Vancouver real estate and the difficult time companies have in attracting skilled labour.
“It’s always an issue,” said Nathan, addressing both points. “It’s no different from what other [cities] are facing. It’s not our mandate to fix those challenges but it’s certainly true that they have an impact.”
The first company announced to receive money from the fund is Mojio, which is an open platform technology business for connected cars.
However, speakers at the event would not confirm how much money Mojio have received, but press materials note that funding ranges between $1 million and 10 million.
The province has said the fund is focusing on companies that need early-stage funding — also known as series A funding.
The government expects the fund to last no more than 15 years, while an unknown portion of the $100 million will be covered by gains from the fund made after 2023.
Kensington previously helped provincial bureaucrats in charge of the Renaissance fund choose venture capital funds in which to invest.
With files from Tyler Orton
