The National Angel Capital Organization (NACO) and Angel Investors Ontario (AIO) are set to receive a combined $5.4 million CAD from the federal government as part of a collaboration to increase the amount of angel capital available to Ontario startups.
The financing comes from the Federal Economic Development Agency for Southern Ontario (FedDev), with the government hoping the money will help 800 businesses and 170 partnerships provincially. The government also expects the capital will increase angel investment activity by 30 percent, and help individual angel groups grow their membership by at least 30 percent.
NACO CEO Claudio Rojas told BetaKit that in addition to NACO and AIO, participating organizations include Halo Health, Capital Angel Network, Golden Triangle Angel Network, and many others.
The funding is an extension of existing federal support to both angel organizations.
In a push to expand its presence across Canada, NACO has received around $710,000 from regional development agencies (RDAs) in the past couple of years. NACO has specifically focused on expanding in Atlantic Canada, Alberta, and the Yukon.
The AIO was created in 2007 to support and create new angel groups in Ontario. The organization supports 16 not-for-profit angel groups and 14 investment clubs, and claims to have enabled just over $500 million dollars to be invested into 700 startups. The public and privately-funded group has received FedDev funding in years past to help with its mission.
On a broader scale, the Government of Canada claims that, since 2015, it has invested more than $11.6 million into 16 different angel networks. The government claims this has led to nearly 1,000 new angel investments worth more than $225 million injected into southern Ontario businesses.
The AIO was also previously backed by the Ontario government but suffered a funding cut in 2019 after the Government of Ontario’s financing for its Angel Network Program came to an end. The cut led to AIO limiting funding to its member organizations.
“The support from the Government of Canada helps enable angel investors across southern Ontario invest their own funds into startups and mentor entrepreneurs in their local communities,” said Jeffrey Steiner, president and executive director of the AIO. “This leads directly to job creation and contributes to inclusive growth across the whole region.”
The need for angel and early-stage capital is an ongoing concern for members of the Canadian tech ecosystem. A NACO report from last year found that Canadian angel organizations made more investments in 2020 but invested less capital overall than in 2019. Rojas noted at the time that the amount invested “needs to be a much bigger number in order to ensure that the pipeline of companies that grow into scale-ups is robust.”
NACO’s national network includes 4,200 angel investors, 50 incubators and accelerators, and 45 angel groups that the organization claims have invested $1.12 billion into 1,500 entrepreneurial companies.
“This collaboration involves nearly twenty angel organizations with a focus on creating additional access points to capital for entrepreneurs from a diversity of backgrounds,” Rojas told BetaKit. “As a national platform, NACO is uniquely positioned to break down regional barriers and we are encouraged by the support of the Federal government as we work to address funding gaps in the early stages of the entrepreneurial journey. This will help create the conditions in Canada for more high-growth companies to emerge and become the unicorn success stories of the future.”
Image courtesy NACO
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