New Fonds Impulsion will expand support for founders amid a decline in seed-stage deal flow across the province.
Investissement Québec has officially relaunched its popular early-stage investment program with a $200 million venture capital (VC) fund for the province's tech startups.
“There are two clear goals: to create the next generation of flagship technologies and to fill gaps in the development stages that are a little under-delivered.”
The fund, known as Fonds Impulsion, was created with $150 million already committed to Impulsion PME, an early-stage investment matching program that turn off briefly last fall. An additional $50 million has been allocated as part of the province's Research and Innovation Strategy.
The spin-off was previously announced in regional budget in March, but IQ has already launched the fund and provided more details on how it will work.
According to IQ early-stage venture capital director Claire Lelievre and venture capital vice president Alex Laverdiere, the fund is targeting pre-seed and seed tech startups across all sectors. In an interview in French that BetaKit translated into English, Laverdiere said the fund plans to invest in about 70 unique companies over its lifetime. It is expected to last approximately 10 years, with the possibility of renewal by the provincial government.
The original Impulsion PME initiative was launched in 2021 under the leadership of former provincial minister Pierre Fitzgibbon. It was allocated an additional $120 million from the province in 2023 as part of the Quebec program. five-year innovation strategy. The program was created and financially supported by the Ministry of Economy, but Investissement Quebec staff managed and implemented the program. In an interview in French, Lelièvre said the company has invested about $65 million in 67 startups since its inception.
The program was abruptly closed in November 2024, leaving few entrepreneurs in trouble. Some told BetaKit that they were counting on the program's investment matching mechanism to close the first rounds of funding. The program has now been closed entirely in favor of a new fund, Fonds Impulsion.
Startups will have to apply and be recommended by an approved ecosystem partner to benefit from the new fund, just like they did with Impulsion PME. IQ still plans to act as a “follow-on” investor, attracting private and quasi-public investors. The fund remains industry-agnostic and is only open to companies headquartered in Quebec, but will regularly assess which industries align with the province's strategic priorities.
“The goal of the fund remains the same, but it is more ambitious,” Lelièvre told BetaKit. The company plans to write checks ranging from $250,000 to $2 million and can now make multiple follow-on investments instead of just one.
Lelièvre, who will lead the fund's management, said IQ has relaxed some application criteria and streamlined the application process to make it more “entrepreneur friendly.”
The initiative comes 10 years after the provincial agency made its first investment in Montreal e-commerce and point-of-sale firm Lightspeed in 2015. Quebec's venture capital landscape has become a source of concern over the past two years, with experts worried that the pipeline of companies is drying up.
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A report from industry group Réseau Capital was published in the spring. concerned experts as the number of seed-stage venture capital deals in the province was revealed to have fallen by more than six months compared to last year, with dollars invested down by two-thirds. Early-stage investment was up 30 percent year-on-year in August, but wider venture capital activities in the province fell sharply.
With its economic development mandate, IQ has a significant position in the Quebec venture capital market. Investments in venture capital and endowment funds make up 17 percent of the agency's portfolio and are valued at $1.2 billion, according to the agency's latest annual report.
IQ and by extension the provincial government have recently invested in early stage funds such as Telegraph Ventureswhich raised $35 million to support artificial intelligence (AI) startups.
The agency recorded annual loss 4.9 percent in 2024 on direct venture capital and indirect fund investments as the broader agency just broke even. In its annual report, IQ attributed the average performance to slowing private investment, a worsening economic outlook and a falling stock market.
Laverdiere said IQ's venture activities have generated a 13 per cent return over 10 years, outpacing the Canadian venture capital market, which is around 10 percent for the internal rate of return over the same period of time.
“There are two clear goals,” Laverdiere said. “To create the next generation of flagship technologies and fill gaps in the development stages that are a little under-delivered.”
Image courtesy of Investissement Québec.
