Canada Growth Fund, Investissement Québec, CDPQ, and BDC have announced their investment in MKB Fund III.
Montréal-based growth equity firm Mackinnon, Bennett & Company (MKB) has closed $145 million from government investment agencies for its third cleantech fund.
Fund III will target North American growth-stage businesses commercializing emission-reduction technologies.
A statement from the federal Canada Growth Fund (CGF) said that it is contributing $50 million to the fund, public pension and insurance investor Caisse de dépôt et placement du Québec (CDPQ) and Investissement Québec (IQ) are investing $35 million each, while the Business Development Bank of Canada (BDC), a Crown corporation, is providing the remaining $25 million.
MKB Fund III will target North American growth-stage businesses that are commercializing emission-reduction technologies in MKB’s areas of focus, which includes clean energy, mobility, built environment, and industrials, CGF said in the statement.
The statement from CGF is the first official acknowledgement of a third MKB fund. According to Private Capital Journal, MKB launched Fund III with an initial $158-million close in March 2024. BetaKit has reached out to MKB for more information.
BDC has led both of MKB’s previous funds, while CDPQ and IQ also led MKB’s Fund II as part of the investor syndicate. MKB Fund II targeted $150 million, but ended up closing with $175 million in 2021 to invest in late venture and early growth-stage companies focused on the electrification, decarbonization, and digitization of transportation and energy.
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“The Fund’s orientation on late and growth-stage opportunities responds to a critical need in the Canadian market, supporting the often-complex capital requirements of homegrown cleantech ventures and facilitating their expansion,” BDC senior vice-president Paula Cruickshank said in a statement. “This is exactly the kind of market gap BDC is designed to address.”
CGF is a $15-billion fund launched in 2022 with a mandate to invest in scaling Canadian clean technology businesses in the commercialization stage. In its 2023 budget, the federal government announced that the Public Sector Pension Plan Investment Board (PSP Investments) was managing the fund. Last week, the CGF backed Burnaby, BC-based cleantech company Svante with a $137-million CAD ($100-million USD) financial commitment in the form of a convertible note.
MKB’s portfolio includes carbon removal startup CarbiCrete, electric scooter company Bird, and traffic management company Miovision. Telus bought out MKB’s share of Miovision for $52 million in April 2023.
Featured image credit Stacey Newman via Getty Images.