Funding directory for the TEI sector

Propulsion Québec launched a large-scale project tostudy and of mobilization of the sector's business ecosystem and financial actors in order to document the current state of the financing chainand to diagnose it, to better understand the financial needs of companies in our sector to ensure growth and to identify local and international sources of financing for the electric and intelligent transportation (EIT) sector.

This project made it possible to:

1. establish the foundations of a strategy and an action plan to contribute to address the financing challenges in the EIT sector
2. to create a directory of sources of financing available to EIT companies based on the different stages of company growth and their level of technological maturity

This financing directory is intended to be exhaustive and will be regularly updated with funding sources in order to provide the most relevant possible guide for Quebec companies in the EIT sector.

This project was made possible thanks to the financial support of the Government of Quebec, the Caisse de dépôt et placement du Québec, the Mouvement Desjardins, MacKinnon, Bennett & Company, Investissement Québec, Fondaction and Langlois Avocats.

Mapping of the major categories of financing¹

There are about ten major categories of investors active in the EIT sector in Quebec, which are presented in the table below and the following diagram :

¹ It should be noted that no public funding program is currently exclusively reserved for the EIT sector or mobility, but that companies in this sector are eligible for programs because of certain characteristics of EIT (GHG reduction, innovation, manufacturing production, etc.)

Non-exhaustive list of the main private and institutional Quebec investors active in the EIT sector in Quebec

About twenty Quebec investors are currently active² in the EIT sector in Quebec; they mainly represent four types of investors (venture capital, growth capital, institutional investors and public investment).

The angel network in Quebec is mainly structured around the Anges Québec organization and supported by the Ange Québec Capital fund (financed by Investissement Québec, CDPQ, FSFTQ and members of Anges Québec).

Here is the non-exhaustive list of the main private (VC / PE) and institutional Quebec investors³ active in the EIT sector in Quebec :

² Who have already invested or are actively seeking opportunities
³ Includes some investors originally based abroad but who have a direct and significant presence in Quebec

Public funding and grant programs Quebec that companies in the EIT sector can benefit from

Many public funding and grant programs also exist at the municipal level or through government-owned companies of the Government of Quebec, and several of them are particularly well suited for companies in the EIT sector.

The following diagrams present the main programs relevant to the EIT sector and indicate at which technology readiness level (Technology Readiness Level – TRL⁴) and stage of development⁵ they are aimed at :

⁴ The different levels of maturity are presented in the appendix
⁵ The different stages of development are presented in the appendix
*Technology Readiness Level: measurement system used to assess the maturity level of a technology.

Here are the details related to each of the programs presented in the previous diagrams :

Research and Transfer Assistance Program (PART – College Research)

• Managed by: MEES
• Type of financing: Grant
• Amounts granted: Up to 50% of eligible expenses.
• Main criteria: This program is accessible to educational institutions that partner with a company to develop a technology.

Mobilizing Projects

• Managed by: MEI
• Type of financing: Grant
• Amounts granted: ~ $15M for EIT
• Main criteria: Not specified

Innovation Program

• Managed by: IQ
• Type of financing: Grant and Loan
• Amounts granted: Between $50k and $350k / Up to 50% of eligible expenses.
• Main criteria: Minimum private funding contribution 20% of the total project cost and the project must have required R&D efforts.

Entrepreneurship Assistance Program (PAEN) – Component 3

• Managed by: MEI
• Type of financing: Grant
• Amounts granted: Between $25k and $150k
• Main criteria: Must receive support from a business incubator or accelerator.

Technoclimat

• Managed by: TEQ
• Type of financing: Loan
• Amounts granted: Up to $3M / Up to 50% of eligible expenses.
• Main criteria: Pre-commercial innovation or pilot testing of a clean technology.

Essor Program – Innovative Investment Project

• Managed by: IQ
• Type of financing: Multiple options
• Amounts granted: Not specified / Up to 50% of eligible expenses.
• Main criteria: Have eligible expenses of at least $100k.

Impulsion PME

• Managed by: IQ
• Type of financing: Quasi-equity or equity
• Amounts granted: Between $250k and $1M / Up to 50% of eligible expenses.
• Main criteria: Have at least one customer and market validation. The company must not have completed a first commercialization cycle and a fundraising round exceeding $250k.

InnovExp Fundort

• Managed by: IQ
• Type of financing: Quasi-equity or equity
• Amounts granted: Between $50k and $1M
• Main criteria: Have a sound financial and operational structure.

Ecocamionnage Assistance Program *

• Managed by: MTQ
• Type of financing: Grant
• Amounts granted: Up to $1M / year
• Main criteria: Not specified

School Transportation Electrification Program *

• Managed by: MTQ
• Type of financing: Grant
• Amounts granted: Between $10k and $150k
• Main criteria: Grants for the purchase of an electric bus and for the acquisition and installation of charging stations.

Sources: EY, Ministry of Economy and Innovation, Innovation, Science and Economic Development Canada

PSO – Innov-R

• Managed by: InnovÉÉ / Prompt / Prima
• Type of financing: Grant
• Amounts granted: Up to 50% of eligible expenses.
• Main criteria: Minimum private contribution 20% of eligible expenses. Collaborative projects between an academic partner and an industrial partner.

Quebec Cybersecurity Innovation Program

• Managed by: Prompt
• Type of financing: Grant
• Amounts granted: Up to $200k
• Main criteria: Project carried out entirely in Quebec and whose intellectual property resulting from the project will be commercialized from Quebec.

ENCQOR 5G Program

• Managed by: Prompt
• Type of financing: Grant
• Amounts granted: Not specified / Up to 50% of eligible expenses.
• Main criteria: Criteria vary depending on the type of funded project.

AI Academic and Business Partnership

• Managed by: InnovÉÉ / Prompt
• Type of financing: Multiple options
• Amounts granted: Academic: Up to $350k / Company: Up to $150k
• Main criteria: Dedicated to collaborative R&D projects in artificial intelligence. Projects with a maximum duration of 3 years.

Several programs of PME MTL

• Managed by: PME MTL
• Type of financing: Multiple options
• Amounts granted: Between $15k and $300k
• Main criteria: Minimum private contribution 20% of eligible expenses for larger loans and head office in Montreal.

Several programs of Longueuil Economic Development

• Managed by: Longueuil Economic Development
• Type of financing: Multiple options
• Amounts granted: Between $15k and $250k
• Main criteria: Loans of $100k and more generally require a minimum private contribution of 20% with collateral.

Several programs of Sherbrooke Innopole

• Managed by: Sherbrooke Innopole
• Type of financing: Multiple options
• Amounts granted: Between $15k and $250k
• Main criteria: Minimum private contribution 20% of eligible expenses for larger loans and head office in Sherbrooke.

Several programs of the City of Quebec

• Managed by: City of Quebec
• Type of financing: Multiple options
• Amounts granted: Between $15k and $500k
• Main criteria: Criteria vary depending on the type of funded project and the stage of development.

Sources: EY, Ministry of Economy and Innovation, Innovation, Science and Economic Development Canada

Public funding and grant programs Canadian that companies in the EIT sector can benefit from

Many public funding and grant programs also exist at the federal level, and several of them are particularly suited to companies in the EIT sector.

The following diagram presents the main programs relevant to the EIT sector and indicates at which technology readiness level (Technology Readiness Level – TRL⁶) and stage of development⁷ they are aimed at :

⁶ The different levels of maturity are presented in the appendix
⁷ The different stages of development are presented in the appendix
* Technology Readiness Level: a measurement system used to assess the maturity level of a technology.

Here are the details related to each of the programs presented in the previous diagrams :

CanExport Innovation

• Managed by: SDC*
• Type of financing: Multiple options
• Amounts granted: Up to $75k
• Main criteria: Minimum contribution 25% of the total project costs

CanExport SMEs

• Managed by: SDC*
• Type of financing: Multiple options
• Amounts granted: Up to $75k
• Main criteria: Revenue in the last year between $100k and $100M

Regional Innovation Ecosystems

• Managed by: DEC
• Type of financing: Multiple options
• Amounts granted: Not specified
• Main criteria: Company that fosters bringing ecosystem actors together and that attracts foreign investment

Strategic Innovation Fund

• Managed by: ISDE
• Type of financing: Multiple options
• Amounts granted: Minimum of $10M
• Main criteria: Minimum contribution 25% of the total project costs

Clean Technology Fund

• Managed by: TDDC
• Type of financing : Term loan
• Amounts granted: Between $2M and $10M
• Main criteria: Minimum contribution 25% of the total project costs

Export Guarantees Program

• Managed by: EDC
• Type of financing : Loan
• Amounts granted: Not specified
• Main criteria: Not specified

Innovative Solutions Canada

• Managed by: ISDE
• Type of financing : Grants / Contracts
• Amounts granted: Phase 1: Up to $150k / Phase 2: Up to $1M / Phase 3: Flexible
• Main criteria: Fewer than 500 employees. Be incorporated in Canada. Conduct R&D activities.

Industrial Research Assistance

• Managed by: NRC
• Type of financing : Multiple options
• Amounts granted: Not specified
• Main criteria: For-profit SMEs in Canada. Fewer than 500 full-time employees.

Canadian International Innovation Program

• Managed by: SDC*
• Type of financing: Multiple options
• Amounts granted: Not specified
• Main criteria: Collaborative R&D projects and international partnerships.

DIVE Program

• Managed by: RN Canada
• Type of financing: Grant
• Amounts granted: Between $300k and $3M
• Main criteria: Submit proof of revenue. Have already secured an investment of $500k. Significant co-financing from a partner.

*SDC : Trade Commissioner Service of Global Affairs Canada
Sources : EY, Ministry of Economy and Innovation, Innovation, Science and Economic Development Canada

Tax credit programs and tax incentives at the provincial and federal level that could benefit EIT companies

Many tax credit programs exist at both the provincial and federal levels. The following table presents the programs most relevant to Quebec companies in the EIT sector.

Quebec

Tax exemption for foreign researchers

• Maximum duration of 60 consecutive months and applies to the salary received by the foreign researcher.
• Not to be confused with the following credit.

Tax exemption for foreign experts

• Maximum duration of 60 consecutive months and applies to the salary received by the foreign expert.
• Not to be confused with the previous credit.

Tax holiday for pre-competitive research in private partnership

• Scientific research and experimental development project.
• Tax credit rate between 14% and 30%.

Tax credit related to salaries – R&D

• Tax credit between 14% and 30% on wages incurred in R&D.

Tax credit for small businesses

• Reduced tax rate if income is below $500k

Canada

R&D tax credit

• Tax credit of 15% or a non-refundable tax credit of 35% on the first $3M tranche of project expenses.

Sources: EY, Ministry of Economy and Innovation, Innovation, Science and Economic Development Canada

Lists of foreign funds and investors that cover the EIT sector

Preliminary research and discussions have identified funds with an interest in evaluating investment opportunities or contributing to potential EIT-specialized funds in Quebec. Thus, in this section we present a non-exhaustive list of foreign funds/investors partially or entirely dedicated to the EIT sector, mainly at seed, start-up and post-start-up stages considered relevant.

Note that some Canadian funds less dedicated to the EIT sector have been added given their potential relevance and scale:

Alliance Ventures

• Country: Netherlands
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Fully

Allianz X

• Country: Germany
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Partially

Alstom / Bombardier

• Country: France / QC
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Fully

Arctern Ventures

• Country: Canada
• Type of investor: Private equity or venture capital fund
• Dedicated to mobility: Partially

ATV (ABB Technical Ventures)

• Country: Switzerland
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Partially

Autotech Ventures

• Country: USA
• Type of investor: Mobility fund
• Dedicated to mobility: Fully

AVL

• Country: Austria
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Fully

BMW Startup Garage

• Country: USA
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Fully

BMW i Ventures

• Country: Germany
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Fully

Denso Corporate Ventures

• Country: USA
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Fully

East Hill Equity

• Country: Sweden
• Type of investor: Private equity or venture capital fund
• Dedicated to mobility: Partially

Energize

• Country: USA
• Type of investor: Private equity or venture capital fund
• Dedicated to mobility: Partially

Energy Impact Partners

• Country: USA
• Type of investor: Private equity or venture capital fund
• Dedicated to mobility: Partially

Fluxunit

• Country: Germany
• Type of investor: Private equity or venture capital fund
• Dedicated to mobility: Partially

Fontinalis

• Country: USA
• Type of investor: Mobility fund
• Dedicated to mobility: Fully

GM Ventures

• Country: USA
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Fully

Google Ventures

• Country: USA
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Partially

Intact Ventures

• Country: Canada
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Partially

Jaguar InMotion Ventures

• Country: UK
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Fully

Kapsch

• Country: Austria
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Fully

Maniv Mobility

• Country:Israel
• Type of investor: Mobility fund
• Dedicated to mobility: Fully

Mobility Ventures

• Country:USA
• Type of investor: Mobility fund
• Dedicated to mobility: Fully

Motus Ventures

• Country:USA
• Type of investor: Mobility fund
• Dedicated to mobility: Fully

Real Ventures

• Country: Canada
• Type of investor : Venture capital fund
• Dedicated to mobility : Partially

Renewal Funds

• Country : Canada
• Type of investor: Private equity or venture capital fund
• Dedicated to mobility: Partially

Samsung Catalyst Fund (Automotive Innovation)

• Country: USA
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Fully

SoftBank Vision Fund

• Country: UK
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Partially

Toyota Ventures

• Country: USA
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Fully

Volvo Group Venture Capital

• Country: Sweden
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Fully

Zukunft Ventures

• Country: Germany
• Type of investor: Corporate venture capital fund
• Dedicated to mobility: Partially

Source : EY

Additional funding sources for theQuebec companies

More general sources of financing are also available for Quebec companies. You can consult the directory updated daily by the Acclr experts of the Chamber of the Montreal Metropolitan Area. Each category will redirect you to a tailored selection of programs and organizations listed on the Info entrepreneurs site.