Indigenous-led venture capital firm Raven Indigenous Capital Partners has announced the final closing of its $100 million CAD second fund, topping its initial target of $75 million.
Raven Capital’s second fund is meant to build on the venture firm’s Fund I, investing exclusively in Indigenous enterprises that demonstrate commercial viability, potential for scale, and measurable community benefit streams.
A spokesperson for Raven Capital told BetaKit that the final close of its second fund occurred in December 2022, amassing participation from MassMutual, Export Development Canada, InBC Investment, Fondation Chagnon, the MacArthur Foundation, and the JW McConnell Foundation.
“We will continue to build innovative and resilient Indigenous economies that are good for our People and good for the planet.”
– Jeff Cyr, managing partner for Raven Capital
Established in 2018 in the Coast Salish Territory, Raven Capital calls itself a social finance intermediary that works in partnership with Indigenous enterprises and social purpose organizations. It invests in, and provides technical assistance within an Indigenous cultural framework.
The Canadian Council for Aboriginal Businesses estimated there are around 325,000 Indigenous-owned companies in North America, including about 50,000 in Canada. Most of these organizations, according to Raven Capital, struggle to access the required capital, capacity building support, and networks to fulfill their potential.
Fund II was created to provide “patient equity” (long-term capital) and equity-like capital, which Raven Capital describes as two critical gaps in the Indigenous finance ecosystem that are essential to the development and scaling of Indigenous enterprises.
“By providing the capital and the support that Indigenous entrepreneurs require to succeed, we will continue to build innovative and resilient Indigenous economies that are good for our People and good for the planet,” said Jeff Cyr, managing partner for Raven Capital and CEO of the Raven Indigenous Impact Foundation.
Raven Capital launched its first fund in 2019 with an initial goal of $5 million. The Vancouver-based VC firm ended up with an oversubscribed round, closing its first fund with $25 million. The second fund was established in September 2022, raising an initial close of $46 million from BDC Capital, Farm Credit Canada, the Telus Pollinator Fund for Good, Vancity, Bank of America, and others.
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As of last year, Raven Capital said that it has made 20 investments in 11 companies, including the likes of banking solutions provider OneFeather, and IT services company PLATO Testing.
Paul Lacerte, managing partner at Raven Capital, told BetaKit during the fund’s first close in September that it has been a tough environment for fundraising.
One representation of that is instances of capital calls not being honoured by limited partners.
Despite these challenges in fundraising, Raven Capital closed its second fund with $25 million more than its initial target. Speaking to Raven Capital’s initial close in September, Lacerte said: “What we’ve found is sort of a unique value proposition [as the] first to market, and a pretty significant untapped desire on the part of investors to find ways to deploy capital into the Indigenous space, both in Canada and in the US.”
With Fund II, Raven Capital aims to deploy half of the capital in Canada, and the other half in the United States.
Lacerte also said that Fund II will enable Raven Capital to invest more at later stages, from the seed to Series A level and potentially beyond, while affording the firm the capacity to make larger investments. Raven Capital aims to invest in 20 to 25 startups through its second fund, writing $1.5 million to $2 million initial cheques and investing up to around $3 million per company. To emphasize maintaining majority Indigenous ownership, Raven Capital also said in September that it aims to take an equity stake of 10 to 20 percent per startup.
Speaking to the current VC market, a Raven Capital spokesperson told BetaKit that though the volatile market conditions from last year have bled onto 2023, the VC firm remains open and is actively investing this year.
“Slowdowns invariably bring challenges, but also opportunities for talent acquisition and disruptive business models,” the spokesperson said.
