Raven Indigenous Capital Partners surpasses initial goal for second fund with final closing of $100 million

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With Fund II, Raven aims to build more innovative indigenous economies.

Indigenous-led venture capital firm Raven Indigenous Capital Partners has announced the permanent closure of its second C$100 million fund, exceeding its initial goal of $75 million.

Raven Capitals’ second fund aims to build on Fund I of venture firms, investing exclusively in Indigenous businesses that demonstrate commercial viability, potential for scale, and measurable streams of community benefits.

A Raven Capital spokesperson told BetaKit that the final closing of its second fund occurred in December 2022, garnering participation from MassMutual, Export Development Canada, InBC Investment, Fondation Chagnon, 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 at Raven Capital

Founded in 2018 in the Coast Salish Territory, Raven Capital describes itself as a social finance intermediary that works in partnership with Indigenous businesses and charitable organizations. It invests and provides technical assistance within an indigenous cultural framework.

The Canadian Council for Aboriginal Businesses has estimated that there are approximately 325,000 Indigenously owned businesses in North America, of which approximately 50,000 are in Canada. Most of these organizations, according to Raven Capital, struggle to access the required capital, capacity building support and networks to realize 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 financial ecosystem that are essential for Indigenous business development and scaling.

“By providing the capital and support Indigenous entrepreneurs need to succeed, we will continue to build innovative and resilient Indigenous economies that are good for our people and the planet,” said Jeff Cyr, managing partner at Raven Capital and CEO of Raven Capital. Raven Indigenous Impact Foundation.

Raven Capital launched its first fund in 2019 with an initial goal of $5 million. The Vancouver-based venture capital firm wound up with a round of oversubscriptions, 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, Telus Pollinator Fund for Good, Vancity, Bank of America and others.

RELATED: Indigenous venture firm Raven Capital eyes U.S. market as it secures $46 million for second fund

As of last year, Raven Capital said it has made 20 investments in 11 companies, including the likes of banking solutions provider OneFeather and IT services firm PLATO Testing.

Paul Lacerte, managing partner at Raven Capital, told BetaKit during the first fund close in September that it was a challenging environment for fundraising.

A representation of this are cases where capital calls are not honored by limited partners.

Despite these fundraising challenges, Raven Capital closed its second fund $25 million more than its initial goal. Speaking at the initial closing of Raven Capitals in September, Lacerte said: “What we have found is sort of a unique value proposition [as the] to market first, and a rather significant untapped desire on the part of investors to find ways to deploy capital in Indigenous space, both in Canada and the United States.

With Fund II, Raven Capital aims to deploy half of its capital in Canada and the other half in the United States.

Lacerte also said Fund II will allow Raven Capital to invest more in later stages, from seed to Series A level and potentially beyond, while also giving the firm the ability to make larger investments. Raven Capital aims to invest in 20-25 startups through its second fund, writing initial checks for $1.5 million to $2 million and investing up to approximately $3 million per company. To emphasize retaining a majority of indigenous ownership, Raven Capital also said in September that it aims to take a 10 to 20 percent equity stake per startup.

Speaking to the current VC market, a Raven Capital spokesperson told BetaKit that although last year’s volatile market conditions have spilled over into 2023, the VC firm remains open and is actively investing this year.

Slowdowns inevitably bring challenges, but also opportunities for talent acquisition and disruptive business models, the spokesperson said.

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