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When Dragons’ Den star Arlene Dickinson set out in 2015 to raise a $100-million venture capital fund focused on Canadian food, beverage, health and wellness startups, she met with skepticism.

When Dragons’ Den star Arlene Dickinson set out in 2015 to raise a $100-million venture capital fund focused on Canadian food, beverage, health and wellness startups, she met with skepticism. At a time when software was eating the world, why was she pitching businesses for the world to eat, some wondered? Some funders asked if there were enough domestic startups to back.

“There were a lot of hurdles to overcome,” Ms. Dickinson said. “It doesn’t matter if you are a dragon on Dragons’ Den, raising capital is really hard.”

Ms. Dickinson has now hit her goal as concerns about food supplies mount globally and shoppers hoard groceries. Her District Ventures has secured $35-million in new capital, primarily from federal Crown corporations Farm Credit Canada and Business Development Bank of Canada, to reach her target.

The veteran entrepreneur, investor and author previously raised the balance from George Weston Ltd., ATB Financial, Ontario Municipal Employees’ Retirement System, Bank of Montreal, Retail Ready Foods Inc., and wealthy investors including Canada Goose chief executive officer Dani Reiss and Montreal’s billionaire Saputo family.

District not only reached its target during an economic meltdown, but Ms. Dickinson’s thesis – that consumers want new, healthy consumables – also has held up.

While the economy reels amid the COVID-19 pandemic, several of District’s investments have experienced a 30 per cent or higher jump in sales since early March, exceeding forecasts, she said.

Those include meal-kit delivery firm Les Recettes Cook it Inc.; natural, high-protein pancake mix maker EnginLabs Inc. (operating as Flourish Pancakes); Chickapea-brand chickpea and lentil pasta maker Earth to Kids Inc.; and halal meat producer One World Foods Inc. District-backed 16-café Balzac’s Coffee Roasters chain has taken a hit as stores closed, but wholesale bean sales are up 50 per cent.

“The pandemic has created even more urgency around Canadian production of these goods,” Ms. Dickinson said. “We all have to eat and take care of our health.”

Earth to Kids CEO and founder Shelby Taylor said she was initially worried because Chickapea pasta is made under contract in COVID-19-racked Italy.

But with the government ensuring food manufacturers stayed open, her focus has shifted to keeping up with demand: Online orders from her Collingwood, Ont.-based startup spiked 1,000 per cent in March year-over-year, and by 500 per cent from retail distributors, as customers seek products with long shelf lives and high protein. With new customers trying the product, she expects sales will remain higher after the pandemic.

“Arlene has said for a long time the consumer packaged goods space was undervalued and didn’t draw enough investment," said Ms. Taylor, who’s raised about half her $5-million in funding from District. “This situation is great proof of that. I’d imagine District is in a very good spot.”

Ms. Dickinson launched District at a time when startups were starting to challenge CPG giants, offering healthier alternatives such as organic or protein-heavy foods or selling directly to consumers online. District has invested $34-million in 25 companies: Fifteen went through its accelerator program and received $150,000 each, while the rest were more established and got $2-million or more each.

FCC treasurer Rebbecca Clarke said the Crown corporation’s $20-million investment expands on its long-standing practice of backing venture capitalists in the agriculture sector.

She said District’s mandate is “well aligned” with the FCC, providing “a unique opportunity for agriculture and food entrepreneurs in Canada to find both the capital and expertise needed to grow and innovate. They are filling a gap in the marketplace.”

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