EST Sector Funding Directory

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:

  1. form the basis of a strategy and action plan to tackle funding challenges in the EST sector
  2. 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.

Gouvernement du Québec
Caisse de dépôt et placement du Québec
Mouvement Desjardins
MacKinnon, Bennett & Company
Investissement Québec
Fondaction
Langlois Avocats

The full Diagnosis of the Funding Chain in Quebec’s Electric and Smart Transportation (EST) Sector is available as a PDF download

1

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:

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:

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.