The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Tag Archives: Cleantech

First Two OETF Investments: ecobee and Bering Media

Ontario’s $250 million Emerging Technologies Fund has closed its first two investments, participating in a $6.73 million round from smart grid company ecobee and a Series A round of undisclosed size from location-based ad company Bering Media.  I am proud to report that Ogilvy Renault, led by Senior Partner Jay Lefton, acted for ecobee in connection with its financing.

Interestingly, the portfolio companies page at OETF lists four “conditionally approved” investments, so perhaps we should stay tuned for two more announcements.

More tidbits: the Qualified Investors page now lists Celtic House (no OETF deal yet?), JLA Ventures (the QI for the ecobee deal), Tech Capital (the QI for the Bering deal and an ecobee investor) and XPV Capital (no OETF deal yet?).

The OETF mandate includes (1) clean technology, (2) life sciences and advanced health technologies, and (3) digital media and information and communications, with (1) and (3) covered by these first two deals.  Look forward to seeing (and working on) some life sciences deals from the OETF.

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$700 Million Close Opens the Doors at Teralys Capital

Teralys Capital, the fund-of-funds announced in Quebec’s budget in March, actually closed on its $700 million today and “is now ready to move ahead with its mandate to finance private venture capital funds that invest in technology companies in the life sciences, information technology and clean technology sectors.”  (I guess the extra $125 million they were planning to raise from the private sector went to Excel’s new fund instead!)

I’m still not sure Teralys has a website, and today’s press release ends with “For further information: The telephone number provided below is for the exclusive use of journalists and other media representatives: Josée Lagacé, (514) 850-4835.”  But not if you’re a journalist running a VC fund.  Or a VC.  In other words, don’t call them, they’ll call you.

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Brain Dump: Vacation Edition

A bit of catching up from the last few days:

Finally, a video that will brighten your day, even though it’s an ad:

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Flow-Through Shares for Cleantech and Biotech in Canada

800px-SieveRick Sutin, a partner at Ogilvy Renault (my home-away-from-home), has a post up at Cleantech in Canada singing the praises of flow-through shares.

So far, the flow-through program in Canada has been available (mainly) to resource exploration and development companies, but we have been arguing for a while that the program would be ideal for Cleantech and Biotech as well.

Why? See if any of these points sound familiar to a Biotech audience:

  1. Success comes from discovery and development programs, and relies on large amounts of high risk venture capital where revenues are uncertain and remote; flow-through shares filled the gap for resource exploration by providing venture capital at premium valuations through the public markets.
  2. Flow-through shares have made Canada’s capital markets the recognized global leader in resource finance and home to more resource companies than any other country in the world. The Canadian industry now develops and attracts the top resource management talent in the world.
  3. Government participates not by picking potential winners, but by giving private sector investors a tax incentive to make those choices and take those risks.

Here’s how flow-through shares work:

A company that issues flow-through shares must spend the proceeds on qualifying expenditures in Canada.  The expenditures are then renounced by the issuer to its investors, who can treat the expenditures as if they made them themselves.

How does it look from government’s perspective?

The government incurs an expense by foregoing tax that would otherwise be paid by the investors. However, the government recoups tax revenues from the recipients of the expenditures that would otherwise not have been made without this program and on the subsequent sale of shares, as the tax cost of shares is reduced to zero in the hands of the investors.

This is one of the few government programs that has successfully run for 20 years, contributing to Canada’s dominance in a significant sector without any problems or abuse.

A good deal all around.

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Canada’s Clean Energy Fund Gets Some Details Detailed

The new Canadian federal $1-billion Clean Energy Fund announced in January’s budget will be spent over five years, according to Natural Resources Minister Lisa Raitt who spoke about the Fund on Tuesday:

  • $650 million will be for carbon capture and storage projects;
  • $200 million will be for smaller renewable and alternative energy demonstration projects; and
  • the remaining $150 million will be for R&D for new types of renewable and clean energy, plus technology to deal with tailings ponds and water use in the oilsands.

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Wednesday Brain Dump: Plant Matter Edition

Some stories from the world of plant biotech:

P.S.  After today, the Wednesday Brain Dump will be dropping the “Wednesday” and becoming an occasional feature.

 

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Some Good Clean Tech Synergy: Biotech + Cleantech + Nanotech = $

A story today at GenomeWeb shows a collaboration among biotech, cleantech and high-tech interest groups successfully generating government support:

Illinois life-science industry advocates for the second straight year are urging state lawmakers to set aside $25 million in grants and tax credits to assist biotech, pharmaceutical, and medical-device startups commercialize new technologies.

Unlike last year, when the proposal died in a state House of Representatives committee, the state’s life-sci industry group expects this year’s version to pass. One key reason: The legislation … would award cash to other tech industries, including alternative-energy, or so-called “clean,” technologies, and the state’s fast-growing nanotech sector.

This type of cross-tech synergy has contributed to government support for other funding initiatives as well.  Look no farther than MaRS, or go as far afield as the UK; common needs for tech commercialization build stronger constituencies.

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Bailout Update: UK and Canada

Two bailout developments to report yesterday:

In the UK, the science minister Lord Drayson is championing a call by Imperial College London and the universities of Cambridge, Edinburgh and Oxford to create a £1bn fund to finance the early stages of university spin-outs:

Medical research was given as an example, but Drayson is said to be pushing for the £1bn fund to finance ideas from all areas of science and engineering.

Here in Canada, the MaRS Blog posted yesterday about BIOTECanada’s Parliamentary Quarterly (pdf), which reiterates BIOTECanada’s previous bailout asks and includes some new data on the Canadian biotech industry, as well as some information on bailouts in other jurisdictions.

I would guess that some of the support apparently being generated by the UK proposal is due to the breadth of the project, with the potential to stimulate a wide range of innovative industries.  With so many common needs and challenges among biotech, cleantech and high tech, I would like to see further collaborative efforts in Canada as well.  Hopefully the Ontario Venture Capital Fund, which appears to be set up along the lines being proposed in the UK, will invest in all three areas and create a foundation for future collaboration.

Update: for some sense of common ground, see this NY Times blog post.

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