Skip to main content

Cycle Capital managing partner Andree-Lise Methot in Montreal on Feb. 8, 2019.

Montreal-based Cycle Capital Management Inc. has raised more than $100-million for what it hopes will be Canada’s largest private sector venture capital fund in clean technology – giving a boost to a sector that still relies largely on government support.

Cycle Capital says it had amassed $109-million, with the goal of reaching between $150-million and $250-million for its fourth North American fund, targeting startups that specialize in areas such as green chemistry, biomass conversion, renewable energy, energy storage and efficiency and sustainable agriculture.

“That’s a super-good start, and who is in the fund is one of the most important signals we need to send to the market," said founder and managing partner Andrée-Lise Méthot, who is one of only a handful female leaders at Canadian venture funds.

Story continues below advertisement

The fund is anchored by $50-million from the Quebec government plus investments from provincially-owned utility Hydro-Quebec and two Quebec labour funds. But the fund also drew a range of private sector players including the Vancouver City Savings Credit Union, Innergex Renewable Energy, industrial giants Rio Tinto and Suez Group, as well as several family foundations, including the McConnell Foundation.

Craig Miller, chief product officer with Shopify Inc., whose family foundation backed the Cycle fund, is joining the firm’s investment committee.

Mr. Miller said he met the Cycle team while doing diligence on some cleantech investments of his own and was impressed by their “great mix of domain knowledge, business acumen and connections” as well as the firm’s commitment to gender equality and investing in Canadian companies.

“Cycle Capital is also one of the most experienced cleantech fund operators in Canada, so I think that their new fund will do well based on the [lessons] from the past funds they have managed. There’s little substitute in life for experience.”

Cycle has close to $500-million in assets under management invested in a range of cleantech subsectors. In addition to its four North American-focused funds, it oversees a $125-million fund focused on China.

Its latest launch follows the close last month of a $40.6-million seed-stage fund by Ecofuel, a Montreal fund co-founded by Cycle. Two other Canadian cleantech fund managers, Toronto-based ArcTern Ventures and Vancouver’s Crysalix Venture Capital, are also in the midst of raising $100-million-plus.

The new funds are a welcome addition to a sector that faces many challenges domestically. A recent report to Innovation Minister Navdeep Bains by cleantech sector experts warned Canadian companies are challenged at home by risk-averse corporate customers who are slow to adopt their technology, low access to capital and a disconnect between government environmental policy targets and regulations. Several cleantech firms say they have an easier time selling abroad than in Canada. The federal government has pledged to support the sector, committing $2.3-billion in new financing since 2015.

Story continues below advertisement

At the same time, the sector is seen as ripe for growth, with the expert panel forecasting cleantech exports will nearly triple to $20-billion annually by 2025 from 2016 levels. Ms. Méthot said the sector is heating up, with foreign industrial giants such as BASF getting on board. “We are seeing more and more oversubscribed rounds of financing" for young cleantech firms, she said.

But Ms. Méthot warned that if current trends continue, more and more Canadian firms could fall under foreign control. ”It’s very difficult to raise [money],” she said. “We’re working hard to be bigger, but our principal motivation is to lead deals and be at the table and make sure we’re not building champions for somebody else in the market. It’s what [Canada] did in the past. We need to make sure we build a very strong company that can stand up for cleantech in Canada.”

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies