Laura Webb: Hi, I’m Laura Webb. I’m a partner in our EHG group and I’m joined today by Lise Birikundavyi. I’m really excited, Lise, to chat with you today. Lise is the co-founder and managing partner of BKR Capital, and is the first Black woman in Canada to manage an institutionally- backed VC fund. BKR invests in early-stage Black-led technology startups to close the funding gap and diversify the face of success. Lise is a firm believer in using the forces of capital markets as a basis for inclusion — inclusive wealth creation, rather — and sustainable poverty alleviation. So Lise, it is so wonderful to have this time to spend with you today. I provided a very basis introduction to the fund, but why don’t you start by giving us an overview of BKR’s focus?
Lise Birikundavyi: Thank you, Laura, and first and foremost, thank you for having me. I’m always excited to take part in any conversations with Osler. We’ve been working together since the very beginning on this ambitious project, so, it’s always nice to be able to share some of the thoughts that we have on this sector and, and on the space with such a great partner.
So about BKR. We are, as you mentioned, a venture capital fund based out of Toronto which is focused on investing in Black-led tech companies in Canada. The reason why we started in this space is because, both myself and my co-founder, have seen the massive gap that exists in the ecosystem. We’re in a country where we have a beautiful quality of education. We have innovators from all walks of life and all backgrounds who are building solutions for our ecosystem at large. But you have this gap in the investment landscape. We started issuing reports and, just last year, it’s 0.15 percent of the funding that goes to Black-led companies. So for us, it’s textbook arbitrage. It’s purpose-driven, yes, but it’s textbook arbitrage. We’re going to go and get those gems in the ecosystem that are building to solve local problems that are thinking globally from day one. And, as you mentioned, when we raised our first fund in 2021, we became a historical fund. It was the first time in Canada that it was a Black-led VC fund that was managing institutional dollars. Right now we’re raising our second fund, but we’re also building the ecosystem so that there’s more inclusivity in general — so that there’s no more of that missed opportunity. We can have a bit more of contributions from people from different walks of life and perspective, and that’s contributing to solving our country’s biggest challenges.
Are there particular sectors or stages of company growth where you see the strongest potential?
Laura Webb: Of course you have your investment thesis, but you’re, sort of industry-agnostic in that sense. So what are you excited about?
Lise Birikundavyi: So yes, we are sector-agnostic. We invest early, so early stage, pre-seed, seed, then strategically or opportunistically, series A. We are excited. Like everyone, we’re looking at the impact of AI in different spaces, but what’s really exciting to us is basically having an understanding of how the technologies that are built today are impacting the future of work, and the future of living with a bit of that inclusive, s-sort of horizontal to it. So everything around the future of work.
We love prop tech as well, fintech. We’ve been investing in healthtech companies that are looking at basically how do you provide healthcare differently, especially when we’re seeing thedemographic changes right now in North America. So we’re really having this future-looking in different sectors. And obviously when we invest, we have to make sure that we can add value; so we have to look at our surrounding, our network, ourselves, our experience, and make sure that we’re the right partner. We’re more than just capital. It’s about being there strategically for the founders. But, with the emergence of AI everywhere, having an understanding of how it better impacts workflow, how it also just helps teams increase their runway. Like how are people using it more efficiently? Who’s being smart about how AI is empowering their company?
So that’s something we’re having a closer look at, both for portfolio companies, but also internally at BKR.
Laura Webb: And you’re not just investing in Canada. You’re also investing in companies that are based around the world. So what does that look like right now?
Lise Birikundavyi: So we have a small allocation for international companies.
For fund one, it was 10%. Fund two it’s 20. We keep that Canadian link strong, so often, more often than not, it’s Canadian founders who decided to relocate, especially sometimes because of the lack of capital that you find in our ecosystem, especially for underrepresented founders. And, what has been really interesting, we’re mainly focused in the U.S. too, in terms of registration, but we love the unfair advantage that our founders have in understanding certain ecosystems that are potentially less represented in Canadian portfolios. So we have a lot of innovations that are touching either the Caribbean region or the African continent, especially in the fintech space, which has been quite interesting. So we’ve been looking at the evolution of that quite a bit.
Laura Webb: What I love is, what you said earlier, is you’re not just providing capital, you’re providing sort of strategic resources. And so beyond capital, what are those resources and support that you’re providing to your companies, and how do you help companies navigate the challenges of scaling domestically and sort of internationally as well?
Lise Birikundavyi: It’s so interesting. It’s several ways, right? So we’re doing it through our network. All of the partners have extensive networks in many geographies. So when a founder starts to think about expanding to XYZ country or in the XYZ space, we often know directly someone or have, like two degrees of separation, with a potential partner or just somebody who can give them additional intelligence, or help them actually get to that level. We do it through fundraising support. I think that, already being this fund that’s not afraid to lead, we also have a good network in the venture capital space, and one of the ways we measure success is the leverage. For each one dollar that we’re putting in a company, how many more dollars are we able to basically attract in that same company? So we’re really like this partner for growth from that specific purpose, and we see so many deals. Being sector-agnostic has its weaknesses, but also its strength in number of deals that we can see. So we’re able to provide strategic insight from what’s happening in the market, and we take board seats. Governance for us is very, very important. But we’re there with founders basically looking at the problems together when they need it.
We never impose ourself, but we’re making sure that, if they need to speak on a Saturday morning, to talk about something, more often than not, we’re available to basically go through what’s the problem, how to basically unpack it and, and yeah, find solutions with them.
We see ourselves as partners for growth.
Laura Webb: Building a company isn’t a nine-to-five gig, and neither is building a fund and running a management company. We recently worked together to complete the successful closing for Fund II. Congratulations. A big milestone.
Having had the experience from Fund I and now onto Fund II, how have you seen the venture capital ecosystem evolve in Canada in the last year? What are the trends and developments in technology or regulation or founder talent that you think are going to be sort of significant influencers and drivers in the next two years?
Lise Birikundavyi: So there’s a few things that I believe will impact theecosystem quite a bit. Regardless of our own space, Ithink that, generally in Canada, access to capital is tighter. Because of the current macroeconomic shifts,everybody is more risk-averse.There’s a stronger look atcurrent unit economics pathways to profitability, which meansthat a company on the VCtrack that has raised, usually there was a certain timeline before theywere expecting to raise again. That timeline has doubled or tripled; soyou have to be able to be extremely capital efficient.That’s where some of the technological advances are, thateverybody’s talking about are helpful.
We talked about it a bit earlier, but AI helpsin improving efficiency in those in different areas. One of the shiftsI think will impact many companies, and especially companies in our investable assetbase, is changes in regulationsin immigration. Because in pastyears we’ve had a lot of qualified new immigrants who basically were coming to thecountry and who were really hungry interms of making their mark, and supporting beautifulprojects. We know a lot of our founders were newcomers not that long ago, orwho had have a lot of them as part of the new members of theirteam. I think that talent base will probably decrease, which is something to look out for, even amongstinternational students too. I wasn’t too longin St. John’s as well, talking with other funds, and a lot of them were hiring in Newfoundland, looking at the new immigrant base as well, because you have a lot of talent that were coming from outside, and this will decrease quite a bit. So it’s going to be interesting to see how people manage from that perspective. So those are some of the shifts that we’re keeping an eye on.
We’re keeping an eye also on the different relationships between countries. We’re helping our portfolio companies right now really focus on high-growth countries. We’re seeing the relationship with our neighbor from the south. It’s just like shifting all the way. It’s hard to predict. It’s hard to plan. So now I’m basically starting to look in other directions to make sure that we create this robustness and just more resilience within the companies that we’ve invested in, and even supporting others in the ecosystem also looking at growth globally differently.
Laura Webb: And resilience. I like that you use that word because I think that’s a key theme sort of throughout the ecosystem currently and over the past few years. Maybe just to end us off, is there something that you’re particularly excited about?
Lise Birikundavyi: I am because I’m excited about, to be honest, the time that we’re in right now. It might seem weird to say, but the fact that there’s so much shift, I think that right now is the best place to position ourselves either as a fund or as a company in any space in a decisive way, with basically the way the world order is shifting, if that makes sense. So if you’re basically a company that’s looking at growing internationally and sort of understanding the different dynamics while everybody’s sort of waiting and watching, it’s really now it’s time to create trust, to build the right partnerships, to build strong products, to build lean, being super capital efficient. And I think that for a lot of the winners that we’ll see in the next few years would have been born in 2025, 2026.
Laura Webb: Yeah, taking the shift as an opportunity.
Lise Birikundavyi: Exactly.
Laura Webb: Well, Lise, thank you so much. Always a pleasure to collaborate. Thank you for chatting with me today and sharing some of your insights. Really appreciate it. Lise Birikundavyi Thank you for having me.
