Major funding categories 1
There are about 10 main types of investors active in Quebec’s EST sector, as per the table and diagram below:
Propulsion Québec, through its Funding working group. has launched a major funding initiative to study and mobilize the ecosystem of companies and financial players in the EST sector. The project seeks to assess and document the state of the funding chain, better understand the funding needs of businesses wishing to secure their growth, and identify sources of local and international funding for the EST sector.
This project has helped:
- form the basis of a strategy and action plan to tackle funding challenges in the EST sector
- create a directory of funding sources available to EST companies according to stage of growth and technology readiness
This comprehensive funding directory is updated regularly with funding sources to ensure Quebec EST businesses have ready access to the information they need.
This project was made possible thanks to the financial support of the Government of Quebec, Caisse de dépôt et placement du Québec, Desjardins Group, MacKinnon, Bennett & Company, Investissement Québec, Fondaction and Langlois Lawyers.
The full Diagnosis of the Funding Chain in Quebec’s Electric and Smart Transportation (EST) Sector is available as a PDF download
1
| Type of investor | Private / Public | Preferred investment stage | Preferred form of investment | Knowledge of the EST sector | Average investment ticket | Ability to take risks |
|---|---|---|---|---|---|---|
| Angel investor | Private | Pre-seed / Seed | Equity / Convertible bonds | Limited | ~$10K-$50K | High |
| Love money / Family & Friends | Private | Pre-seed / Seed | Equity / Convertible bonds | Limited | ~$10K-$50K | High |
| Venture capital fund | Private | Seed / start-up / post-start-up | Equity | Average | ~$1 million-$5 million | Average to high |
| Private equity fund | Private | Growth / maturity | Equity | Limited | ~$10 million-$50 million | Average |
| Industry groups (includes corporate venture capital) | Private | Seed / start-up / post-start-up / growth | Equity / Partnership | High | ~$1 million-$50 million | Average to high |
| Family offices | Private | Growth / maturity | Equity / Convertible bonds | Limited | ~$1 million-$20 million | Average |
| Banks | Private | Growth / maturity | Debt | Limited | - | Low |
| Institutional investors | Public / semi-public | Growth / maturity | Equity / Convertible bonds | Limited | ~$1 million-$50 million | Low to average |
| Public funding and grants | Public | Seed / start-up / post-start-up / growth | Grants / loans / tax credits / equity or quasi-equity | Average | ~$500K-$5 million | - |
1 There is no public funding program currently reserved exclusively for the EST sector or for mobility, but companies in this sector are eligible for programs based on certain features of EST (GHG reduction, innovation, manufacturing, etc.)
2
Non-exhaustive list of leading private and institutional Quebec investors active in EST
Some 20 Quebec investors are now active 2 in EST in Quebec, representing mainly four types of investors (venture capital, private equity, institutional investors, and public investment).
The angel network in Quebec is mainly organized around Anges Québec and supported by the Ange Québec Capital fund (funded by Investissement Québec, CDPQ, FSFTQ, and members of Anges Québec).
Below is a non-exhaustive list of leading Quebec private (venture capital / private equity) and institutional investors 3 active in Quebec’s EST sector:
Finalta Capital announces $50 million in non-dilutive financing dedicated to the Electric and Smart Transportation sector
2 Have already invested or are actively looking for opportunities
3 Includes some investors initially based abroad but with a direct and significant presence in Quebec
3
QUEBEC public funding and grants available to EST businesses
Many public funding programs and grants are also available at the municipal level or from government-related corporations, a number of which are particularly well suited for EST businesses.
The following diagram shows the programs most relevant to the EST sector and indicates the technology readiness level (TRL 4) and stage of development 5 they address:
4 The different levels of readiness are detailed in the Appendices of the full report
5 The different stages of development are detailed in the Appendices of the full report
* Technology readiness level: system og mesurement used to evaluate the readiness level of a technology.
The details for each program shown in the above diagrams are as follows:
| Program name | Managing entity | Type of financing / form of investment | Order of magnitude of amounts granted | Key financial assistance criteria |
|---|---|---|---|---|
| Programme d’aide à la recherche et au transfert (PART - college-level research) | MEES | Grant | Maximum of 50% of eligible expenses | This program is available to educational institutions that partner with companies to develop technologies |
| Pivotal projects | MEI | Grant | ~$15 million for EST | Not specified |
| Innovation Program | IQ | Grant and loan |
Between $50K and $350K Maximum of 50% of eligible expenses |
Minimum of 20% of total project cost contributed by private sources and required R&D effort |
| Programme d’aide à l’entrepreneuriat (PAEN) - Component 3 | MEI | Grant | Between $25K and $150K | Must receive support from a business incubator or accelerator |
| Technoclimat | TEQ | Loan |
Maximum of $3 million Maximum of 50% of eligible expenses |
Pre-commercial innovation or clean technology testing |
| ESSOR - Innovative investment project | IQ | Multiple options |
Not specified Maximum of 50% of eligible expenses |
Have eligible expenses of at least $100K |
| Impulsion PME | IQ | Equity or quasi-equity |
Between $250K and $1 million Maximum of 50% of eligible expenses |
Have at least one client and market validation. The business must not have completed an initial marketing and financing round greater than $250K. |
| Innovexport Fund | IQ | Equity or quasi-equity | Between $50K and $1 million | Have a sound financial and operational structure |
| Ecocamionnage financial assistance program * | MTQ | Grant | Maximum of $1 million / year | Not specified |
| Programme d’électrification du transport scolaire * | MTQ | Grant | Between $10K and $150K | Subsidies for the purchase of electric buses and the acquisition and installation of charging stations |
Sources : EY, Ministère de l’Économie, de la Science et de l’Innovation and Canada Economic Development
| Program name | Managing entity | Type of financing / form of investment | Order of magnitude of amounts granted | Key financial assistance criteria |
|---|---|---|---|---|
| PSO - Innov-R | InnovÉÉ / Prompt / Prima | Grant | Maximum of 50% of eligible expenses |
Private contribution of at least 20% of eligible expenses Collaborative projects between an academic and an industrial partner |
| Quebec Cybersecurity Innovation Program | Prompt | Grant | Maximum of $200K | Projects carried out entirely in Quebec and whose resulting intellectual property will be commercialized in Quebec |
| ENCQOR 5G program | Prompt | Grant |
Not specified Maximum of 50% of eligible expenses |
Criteria vary depending on the type of project being funded |
| Partenar-IA Académique et Entreprise | InnovÉÉ / Prompt | Multiple options |
Académique: Maximum of $350K Entreprise: Maximum of $150K |
Collaborative artificial intelligence R&D projects Maximum 3 years |
| Multiple programs | PME MTL | Multiple options | Between $15K and $300K | Minimum private contribution of 20% of eligible expenses for bigger loans + headquartered in Montreal |
| Multiple programs | Développement économique Longueuil | Multiple options | Between $15K and $250K | Loans over $100K generally require a minimum private contribution of 20% with collateral |
| Multiple programs | Sherbrooke Innopole | Multiple options | Between $15K and $250K | Minimum private contribution of 20% of eligible expenses for bigger loans + headquartered in Sherbrooke |
| Multiple programs | Ville de Québec | Multiple options | Between $15K and $500K | Criteria vary depending on the type of project being funded and its development stage |
Sources : EY, Ministère de l’Économie, de la Science et de l’Innovation and Canada Economic Development
4
CANADIAN public funding and grants available to EST businesses
Many federal public funding programs and grants are also available, a number of which are particularly well suited for EST businesses.
The following diagram shows the programs most relevant to the EST sector and indicates the technology readiness level (TRL 6) and stage of development 7 they address:
6 The different levels of readiness are detailed in the Appendices of the full report
7 The different stages of development are detailed in the Appendices of the full report
* Technology readiness level: system og mesurement used to evaluate the readiness level of a technology.
Details for each program in the above diagram are as follows:
| Program name | Managing entity | Type of financing / form of investment | Order of magnitude of amounts granted | Key financial assistance criteria |
|---|---|---|---|---|
| CanExport Innovation | TCS * | Multiple options | Maximum of $75K | Minimum contribution 25% of the project cost |
| CanExport SMEs | TCS | Multiple options | Maximum of $75K | Previous year’s sales between $100K and $100 million |
| Regional Innovation Ecosystems Program | CED | Multiple options | Not specified | Company that brings the ecosystem stakeholders together and attracts foreign investment |
| Strategic Innovation Fund | ISED | Multiple options | Minimum of $10 million | Minimum contribution 25% of the project cost |
| Cleantech Fund | SDTC | Term loan | Between $2 million and $10 million | Minimum contribution 25% of the project cost |
| Export Guarantee Program | EDC | Loan | Not specified | Not specified |
| Innovative Solutions Canada | ISED |
Grants Contracts |
Phase 1: Maximum of $150K Phase 2: Maximum of $1 million Phase 3: Flexible |
Have fewer than 500 employees Be incorporated in Canada Conduct R&D |
| Industrial research assistance | NRC | Multiple options | Not specified |
Canadian for-profit SMEs Have fewer than 500 full-time employees |
| Canadian International Innovation Program | TCS * | Multiple options | Not specified | Collaborative R&D projects and international partnerships |
| EVID program | NRCan | Grant | Between $300K and $3 million |
Submit proof of income Have secured a $500K investment Substantial co-financing from a partner |
* TCS: Global Affairs Canada Trade Commissioner Service
Sources : EY, Ministère de l’Économie et de l’Innovation, Innovation, Sciences et Développement économique Canada
5
Provincial and federal tax credit and tax incentive programs available to EST businesses
Many tax credit programs are available at both the provincial and federal levels. The following table shows the most relevant programs for Quebec EST businesses.
| Government | Tax credit or tax assistance | Short description |
|---|---|---|
| QUEBEC | Tax holidays for foreign researchers |
Maximum of 60 consecutive months and applies to the foreign researcher’s salary Not to be confused with the following credit |
| Tax holidays for foreign experts |
Maximum of 60 consecutive months and applies to the foreign expert’s salary Not to be confused with previous credit |
|
| Tax holidays for private partnership pre-competitive research | Scientific research and experimental development project. Tax credit rate between 14% and 30%. | |
| R&D payroll tax credit | Tax credit of between 14% and 30% on R&D salaries incurred | |
| Tax credit for SMEs | Reduced tax rate if revenue less than $500K | |
| CANADA | R&D tax credit | 15% tax credit or 35% non-refundable tax credit on the first $3M of project expenses |
Sources : EY, Ministère de l’Économie, de la Science et de l’Innovation and Canada Economic Development
6
Lists of foreign funds and investors in the EST sector
Preliminary research and discussions have identified funds interested in assessing investment opportunities or contributing to potential EST-specialized funds in Quebec. Here is a non-exhaustive list of foreign funds / investors partially or entirely focused on the EST sector, deemed relevant, especially at the seed, start-up and post-start-up stages.
Note that certain less EST-relevant Canadian funds have been included on the list given their size and potential value:
| Organization | Country | Type of investor | Focus on mobility |
|---|---|---|---|
| Alliance Ventures | Netherlands | Venture capital fund | Total |
| Allianz X | Germany | Venture capital fund | Partial |
| Alstom / Bombardier | France / QC | Venture capital fund | Total |
| Arctern Ventures | Canada | Private equity or venture capital fund | Partial |
| ABB Technology Ventures (ATV) | Switzerland | Venture capital fund | Partial |
| Autotech Ventures | USA | Mobility fund | Total |
| AVL | Austria | Venture capital fund | Total |
| BMW Startup Garage | USA | Venture capital fund | Total |
| BMW i Ventures | Germany | Venture capital fund | Total |
| Denso Corporate Venture Capital | USA | Venture capital fund | Total |
| East Hill Equity | Sweden | Private equity or venture capital fund | Partial |
| Energize Ventures | USA | Private equity or venture capital fund | Partial |
| Energy Impact Partners | USA | Private equity or venture capital fund | Partial |
| Fluxunit | Germany | Private equity or venture capital fund | Partial |
| Fontinalis | USA | Mobility fund | Total |
| GM Ventures | USA | Venture capital fund | Total |
| Google Ventures | USA | Venture capital fund | Partial |
| Intact Ventures | Canada | Venture capital fund | Partial |
| InMotion Ventures | UK | Venture capital fund | Total |
| Kapsch | Austria | Venture capital fund | Total |
| Maniv Mobility | Israel | Mobility fund | Total |
| Mobility Ventures | USA | Mobility fund | Total |
| Motus Ventures | USA | Mobility fund | Total |
| Real Ventures | Canada | Venture capital fund | Partial |
| Renewal Funds | Canada | Private equity or venture capital fund | Partial |
| Samsung Catalyst Fund | USA | Venture capital fund | Total |
| SoftBank Vision Fund | UK | Venture capital fund | Partial |
| Toyota Ventures | USA | Venture capital fund | Total |
| Volvo Group Venture Capital | Sweden | Venture capital fund | Total |
| Zukunft Ventures | Germany | Venture capital fund | Partial |
Source : EY
For more general funding sources available to Quebec businesses, consult the directory updated daily by the Chamber of Commerce of Metropolitan Montreal’s Acclr experts. Each category will redirect you to a customized selection of programs and organizations listed on the Info entrepreneurs site.