BDC Capital has so far deployed just under a tenth of the funding it has allocated to help startups close financing rounds as they weather the COVID-19 pandemic. 

As of May 14, the venture arm of the Business Development Bank of Canada had signed deals with eight companies for financing worth a combined $14.2 million of the $150 million BDC has budgeted for the Capital Bridge Financing Program. There are 206 active applicants collectively seeking $386 million, according to Small Business Minister Mary Ng’s office. 

The Logic first reported in late March that BDC Capital was launching a program to co-invest in venture-backed startups using convertible notes. The program is intended to fill gaps in the federal government’s COVID-19 relief funding, for which many startups don’t qualify despite being impacted by the virus. After it launched officially in early April, some investors expressed concern that the funding pool was too small and the terms were too prohibitive to address startups’ funding needs in an economy poised to see a drop in venture capital. 

Kim Furlong, CEO of the Canadian Venture Capital and Private Equity Association, declined to comment on whether the amount of funding distributed to date was sufficient. “Given the situation, we did anticipate the need to be agile and the possibility of adjustments to the program,” she told The Logic in an email. “We are in the process of consulting our membership on their experience to-date so we can continue our constructive and collaborative discussions with the BDC on the roll-out of emergency programs.”

BDC did not respond to The Logic’s requests about the funding it’s distributed to date. 

Kevin Talbot, a managing partner at Relay Ventures, said the amount of funding allocated in just over a month seemed reasonable. “If the numbers were lower I would be concerned about the process being too rigorous,” he said in an email to The Logic. “If the numbers were higher I would be concerned about a lack of discipline.” He also said the $2-million average deal size also seemed about right, given that the funds were matching other investors’ contributions to the funding round.

“I think the thing to remember is that this isn’t ‘emergency’ funding like other [COVID-19-related] government programs. Our sense of urgency in venture is usually measured in months (certainly not days).” Relay Ventures is an investor in The Logic.

BDC also declined to disclose how much it’s given out thus far from a $20-billion budget to fund up to 80 per cent of loans of up to $6.5 million, which companies get through their existing financial institutions. “Numbers on the BDC Co-Lending Program will be available in June,” said spokesperson Jean Philippe Nadeau. Finance Minister Bill Morneau announced the program on March 27, and BDC declared it open on April 24.

With files from Murad Hemmadi