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“We’re really, really confident that we will be able to weather the storm,” Maurice said.
The Series C for Busbud also comes as the coronavirus pandemic continues to put financial pressure on firms and make for an uncertain global investing environment. That environment is making it harder than normal for small and medium-sized companies to grow into bigger firms, which was a pre-existing issue in Canada.
The CBGF was launched in 2018, following work done by the federal government’s Advisory Council on Economic Growth, which found many Canadian companies weren’t growing after they reached a certain point. And Rossolatos says that, at the moment, some investors have had to focus on their existing portfolio or hold off on additional deals.
“However, the growth capital gap in Canada has become much larger as a result of the pandemic,” he said. “At CBGF, we have chosen to ‘lean in’ to support entrepreneurs where we could.”
The Toronto-based CBGF, which is backed by 13 of Canada’s biggest financial institutions, started out with capital commitments of $545 million from shareholders such as Royal Bank of Canada and Manulife Financial Corp. The fund typically shoots for investments of between $3 million to $20 million in established Canadian companies, taking minority ownership stakes in them in return.
CBGF has now invested $137.8 million in 15 companies, including seven investments made during the pandemic, Rossolatos said.
