Introduction
Canada’s largest venture capital investor is making a bold comeback. BDC Capital, the investment arm of the Business Development Bank of Canada (BDC), has officially launched a new $150-million CAD Life Sciences Venture Fund. The fund targets seed- and early-stage companies in therapeutics and medical technologies. Moreover, it marks a significant strategic shift for the Crown corporation, which stepped back from direct life sciences investing years ago.
This announcement signals that Canada is ready to lead from within — not rely on foreign capital to sustain one of its most vital industries.
Why BDC Is Returning to Life Sciences
A Sector Left Behind Too Early
BDC once ran a dedicated Healthcare Venture Fund, launched in 2013, which allocated $270 million to more than 25 startups. That fund eventually spun off in 2019 as the independent entity Amplitude Ventures, with BDC serving as its anchor investor. After the spinout, BDC stepped back from direct life sciences investing entirely.
BDC CEO Isabelle Hudon now admits the bank moved on too soon. “There’s still a role for us to play in this sector and, probably, we pulled out too quickly, too early,” Hudon said at the Medteq+ Health Innovation Summit in Montreal. The new fund directly addresses that gap.
A Dramatic Funding Decline
The numbers paint a stark picture. According to the Canadian Venture Capital & Private Equity Association (CVCA), Canada’s life sciences sector attracted only $837 million in investment in 2025 — the lowest annual figure since 2018. That represents a 47 percent year-over-year drop in dollars invested and an 11 percent decline in deal volume. Consequently, early-stage companies, especially those in therapeutics and medical devices, struggle to find capital at the seed and Series A stages.
What the New Fund Will Invest In
Target Investment Stages
BDC Capital’s new fund focuses on two distinct investment stages:
- Seed stage: Cheques ranging from $1 million to $3 million
- Series A stage: Cheques ranging from $5 million to $8 million
The fund aims to back 10 to 15 companies over its full life cycle. Furthermore, it provides what BDC calls “patient capital” — long-term funding that complements the private market, especially for companies that face higher capital requirements due to hardware costs and regulatory pathways.
Two Core Focus Areas
The fund targets two sectors where the funding gap is most acute:
Therapeutic Products — This includes biotechnology-based innovations such as laboratory-developed proteins and antibodies, gene and cell therapies, and nucleic acid-based medicines.
Medical Technologies — This covers medical devices, diagnostic tools, imaging technologies, surgical robotics, and clinical software used to diagnose, treat, or monitor health conditions.
Together, these verticals fall under the broader life sciences umbrella, which spans everything from biotech to surgical innovation.
Meet the Managing Partner
Parimal Nathwani Leads the Charge
BDC has appointed Parimal Nathwani as Managing Partner of the new fund. Nathwani previously led the life sciences incubator Toronto Innovation Acceleration Partners (TIAP). He brings more than 20 years of experience in building and scaling biotechnology and medical technology companies. His expertise spans scientific models, commercialization strategies, and the unique challenges life sciences companies face as they grow.
“We’re really excited and eager to start deploying,” Nathwani said in an interview. His hands-on background in both science and business gives the fund a sharp commercial focus from day one.
Canada’s Life Sciences Funding Gap
A Sector That Punches Above Its Weight
Life sciences contribute $18.3 billion annually to Canada’s economy, representing 0.8 percent of GDP and supporting more than 135,000 specialized jobs. Additionally, the sector consistently delivers the strongest 10-year venture capital returns in Canada. Yet, despite this performance, early-stage companies still face serious financing gaps.
A 2023 third-party report commissioned by the federal government warned that Canadian life sciences funds are too small compared to their US counterparts. “The 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,” the report noted.
Too Much Reliance on Foreign Capital
Geneviève Bouthillier, Executive Vice President of BDC Capital, put it directly: “It’s a sector where Canada can, and should, lead internationally, but too much reliance on foreign investment is holding us back.” The new fund actively pushes back against that trend. By anchoring domestic capital at the earliest stages, BDC aims to retain scientific talent and help Canadian founders build globally competitive companies from home.
What This Means for Canadian Startups
A New Window for Early-Stage Founders
For Canadian founders building in therapeutics or medical devices, this fund opens a critical new door. Previously, seed-stage life sciences companies had very few domestic options. Now, BDC Capital steps in as a patient, early-stage backer with deep sectoral expertise. Moreover, the fund aims to attract additional private capital by acting as a confident first mover — BDC has historically been among the first investors in, and the last to exit.
Looking Ahead
BDC’s VP of VC, Regan, expects the organization to launch a second life sciences fund in four to five years, following the same renewal pattern seen with its Industrial Innovation Fund. In addition, the launch aligns with the federal government’s broader Venture and Growth Capital Catalyst Initiative, which explicitly prioritizes life sciences investment across Canada.
Conclusion
BDC Capital’s $150M Life Sciences Venture Fund is more than a financial announcement — it is a statement of intent. Canada’s largest VC is doubling down on an underserved sector, backing early-stage therapeutic and medical technology companies that have long struggled to find domestic funding. Under Parimal Nathwani’s leadership, the fund arrives at a critical moment for Canadian life sciences. Therefore, founders and investors alike should take note: the capital gap is beginning to close.
