Parimal Nathwani will manage fund directly investing in therapeutics and MedTech companies. <\/p>\n
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Canada\u2019s largest VC has officially launched a new $150-million CAD fund to directly invest in life sciences companies, years after retreating from the sector<\/a>.\u00a0<\/p>\n The Business Development Bank of Canada (BDC)\u2019s VC arm, BDC Capital, announced on Thursday that the new fund will invest in seed- and Series A-stage companies building therapeutic products and medical technologies. Both verticals fall under the broader life sciences umbrella, which includes everything from biotechnology, like vaccines, to medical devices used in surgeries. Parimal Nathwani, who helmed life sciences incubator Toronto Innovation Acceleration Partners (TIAP), has joined as the fund\u2019s managing partner.\u00a0<\/p>\n \u201cWe\u2019re really excited and eager to start deploying.\u201d<\/p>\n Parimal Nathwani, BDC<\/p>\n In an interview with BetaKit, Nathwani said the fund aims to back 10 to 15 companies over its life cycle, writing cheques between $1 million and $3 million at the seed stage, and between $5 million and $8 million at the Series A stage, as well as follow-on investments. Nathwani, who started at BDC on Monday, said hiring for the fund\u2019s team is ongoing.\u00a0<\/p>\n Nathwani previously led TIAP, an Ontario-based incubator dedicated to the life sciences, for more than six years and worked at the organization for 17 years. He also sat on the boards of multiple life sciences companies, including Toronto\u2019s Vasomune Therapeutics, as well as the non-profit Life Sciences Ontario. At TIAP, Nathwani helped build management teams and did pre-seed investments.\u00a0<\/p>\n \u201cThat access-to-capital piece beyond that initial pre-seed capital, to get these companies to grow and scale, is certainly a clear market gap,\u201d Nathwani said. \u201cThe role at BDC\u2026is a natural extension of the work I was doing.\u201d\u00a0<\/p>\n BDC says the VC fund will provide \u201cpatient capital\u201d that complements the private market for early-stage life sciences ventures, which can be more capital-intensive than software companies due to hardware costs and regulatory pathways. According to the Canadian Venture Capital & Private Equity Association\u2019s annual report<\/a>, the Canadian life sciences sector<\/a> saw $837 million invested in 2025\u2014the lowest annual amount in the sector since 2018. It recorded a 47-percent year-over-year decline in dollars invested and an 11-percent decline in deal volume.\u00a0<\/p>\n The team conducted formal and informal consultations over the past 12 to 18 months about the fund\u2019s focus. Therapeutics and medical device companies came up as two sectors where funding was harder to find at the seed and Series A stages, Nathwani said.\u00a0<\/p>\n RELATED: BDC head says bank pulled back from life sciences \u201ctoo early\u201d as it preps new VC fund<\/a><\/p>\n The $150-million envelope comes from fresh capital off of BDC\u2019s balance sheet, according to Joseph Regan, the senior managing partner of venture capital at BDC Capital. Regan oversees BDC Capital\u2019s direct investment funds, including the recently announced StrongNorth Fund<\/a> for defence tech.\u00a0<\/p>\n The life sciences fund marks a return to a sector that BDC CEO Isabelle Hudon has said the bank drew away from too early<\/a>. The Crown corporation once had a dedicated fund for investing in medical and health technologies, which spun off as the independent entity Amplitude Ventures<\/a> in 2019, with BDC as its anchor investor. BetaKit first reported<\/a> that BDC was recruiting to launch a life sciences fund in November of 2025.<\/p>\n Canadian VCs have been raising the alarm about a lack of funding opportunities in life sciences for years. A third-party report<\/a> commissioned by the federal government in 2023 said that investors warned of a gap in the life sciences sector, noting Canadian funds were too small compared to their US counterparts.\u00a0<\/p>\n \u201cThe commensurate explosion of commercial success stories witnessed in the United States has mostly failed to materialize in Canada, partly because of a dearth of specialized capital providers,\u201d said the report, authored by the Centre for Digital Entrepreneurship and Economic Performance (DEEP Centre). It added that sector leaders expressed concern in 2020 about \u201cinadequate seed-stage funding for life sciences ventures, pointing to a dearth of capital and too few seed-stage investors.\u201d\u00a0<\/p>\n