BKR Capital has received a multimillion-dollar investment from the Government of Canada to continue supporting and funding Black-owned tech businesses in Ontario and Quebec.

The Black-owned VC firm has invested in companies like Simmunome Inc., which uses AI to predict whether drug candidates will succeed or fail in clinical trials. The Montreal-based business recently closed a $2 million pre-seed funding round. It also invested in eight other companies, including Treepz, Goodee, and Woveo.

“Supporting inclusive growth in the venture capital sector ensures that entrepreneurs and start-ups led by diverse individuals receive the investments that they historically haven’t been granted simply because of their identity…,” Valdez said in a statement.

The investment, announced by Minister of Small Business Rechie Valdez, totals $25 million for five venture capital fund managers as part of the renewed Venture Capital Catalyst Initiative (VCCI). District Ventures Capital, Ripple Ventures, Sandpiper Ventures, and The51 also received funding.

This is the first of two investments for the VCCI, announced in 2021's Canadian budget. As part of a combined $450 million investment into venture capital funds, the renewed VCCI is expected to inject at least $1.6 billion into Canada’s innovation capital market. A second call for expressions of interest for another round of investments of $25 million is ongoing and will close on Nov. 22, 2023.

Each recipient must report their progress on enhancing diversity and gender equality across the VC ecosystem. The government believes this will ensure that women and other members of under-represented communities in the small-to-medium enterprise space own more firms.

In 2021, Canada’s VC industry invested $15.1 billion across 805 deals, more than double the previous record set in 2019.

Hoping to surpass the previous totals, the federal government recently launched the Inclusive Women Venture Capital Initiative under the Women Entrepreneurship Strategy. This $15 million initiative aims to strengthen the VC environment for Canadian women entrepreneurs and make it more inclusive. It will also support projects that help enhance the capacity of women entrepreneurs to access VC funding, contribute to the increasing representation of women in the VC industry and help ensure that the VC industry is sensitive to gender and potential unconscious bias.

“We’re making more capital available to firms led by women and other members of under-represented communities, and this will in turn accelerate the development of the next generation of bright and diverse Canadian entrepreneurs and innovators,” Valdez said.

Furthermore, BDC, which manages the VCCI, is Canada’s most active single VC investor, managing over $4.2 billion in VC investments. The bank is also increasing VC investments to help increase diversity in the area, having recently launched its $500 million Thrive Venture Fund and Lab for Women.