BDC Capital doubles its commitment to Mistral Ventures Partners

BDC Capital’s announcement Tuesday that it has committed another $3 million to Mistral Ventures Partners early stage venture capital fund will have “significant impact,” according to Mistral’s managing director Code Cubitt.

“A number of our companies are doing quite well, and so (BDC’s) additional investment allows us to double down, if you will, on some of the companies that are trending towards significant growth,” Mr. Cubitt said.

Mistral’s investment focus is on smart enterprise companies dealing with mobility, the cloud, and the Internet of Things. Its 12-company portfolio includes five Ottawa-based firms: CENX, Klipfolio, Giatec Scientific, Rare Logic, and The Better Software Company.  

Mistral’s $25-million fund is about three years into its 10-year lifespan, and Mr. Cubitt said there will probably be four or five more companies added to its portfolio. And with Mistral based in Ottawa, that is good news for the startup community.

“I’m sitting at a pitchfest today. I’m looking at 12 companies by three o’clock and the majority of them are Ottawa companies,” Mr. Cubitt said. “It’s really impressive. This whole thing is blowing up.”

Pitchfests like the one Mr. Cubitt attended Tuesday at L-Spark in Kanata don’t give investors a lot of time to get to know the company, but Mr. Cubitt said he looks for a credible team, dependable technology with a unique business model, and a large and relevant market.

“If they pass those three, we go a few layers deeper,” he said.

BDC Capital’s first invested in Mistral in June 2014 and Tuesday’s announcement brings its total commitment to $6 million. It is Mistral’s only institutional investor, Mr. Cubitt said, and one of the fund’s anchors.

“They play a critical role for early stage VCs in allowing funds like ours to get off the ground, prove a particular model and start to scale,” he said.

BDC Capital’s managing director of fund investments Dominique Bélanger said Mistral has done an “outstanding job” identifying high-potential startups.

"Their connections in Canada and the U.S. and the mentorship the team provides have made a big difference to their portfolio companies,” he said in a release.

Tuesday’s announcement is a rare bit of publicity for Mistral. Mr. Cubitt said he doesn’t make a habit of seeking publicity.

“The good companies end up finding us without a lot of publicity,” he said, adding it’s the startups that deserve the press anyway.

“They’re the ones that need customers, they’re the ones that need growth and they’re the ones that do all the hard work so I’m all for them getting the majority of it.”