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Canadian venture capital soars in 2015; Quebec and BC catch up to Ontario

Canadian venture capital soars in 2015; Quebec and BC catch up to Ontario

Posted by PanamericanWorld on March 10, 2016

Americans hoping Canada’s grass is greener than Donald Trump’s landscaping plans have more good news to work with. Canadian startups are raising more money than ever before and might be looking to spend it on more workers from abroad. Every major startup ecosystem in Canada increased its venture capital last year according to a new report from the Canadian Venture Capital and Private Equity Association (CVCA). Led by Toronto, the province of Ontario garnered nearly $1 billion in deals, more than any other region. But that lead is eroding as Quebec and British Colombia raised several hundred million dollars each.

Seed and early stage investments, a major worry across Canada in the past, bloomed. Early stage funding exploded at $1.16 billion, up from $794 million the year before. However, late stage investments fell significantly, from $785 million to $530 million. Ontario still lead with $939 million in deals compared to Quebec’s $693 million. British Colombia grabbed $450 million while Alberta nabbed $104 million.

The number of exits grew steadily with 42, including 33 acquisitions. The value of those exits was stoic, going from $1.4 billion in 2014 to $4.3 billion in 2015. Vertical-wise, ICT led the pack for the third year running with $1.3 billion over 325 deals; of those, more than half the money and investments went to SaaS companies.

Domestic Canadian capital grew mightily. iNovia Capital invested $507 million, Lumira $233 million, and Relay Ventures $180 million. Real Ventures contributed $200 million to Canadian tech, but was far more prolific than other firms by making a total of 78 investments across the country.

Quebec scores the biggest Canadian investments of 2015

In a sign of how strong Quebec has become, the most prolific public or corporate Canadian investment fund was Fonds de solidarité FTQ with 20 deals worth $94 million. Quebec’s government fund, Investissement Québec, also stepped up with 30 deals worth $112 million.

The new data comes in light of Canada having four cities ranked in the global Top 50 by Startup Compass last year. Toronto (17th), Vancouver (18th) and Montreal (20th) all made the Top 20 while Waterloo-Kitchener startups won an honorable mention for its prolific innovation. While that report indicated all of Canada was struggling to keep up with U.S. venture capital, these latest figures offer hope that Canada is making up ground in the United States.

Both Montreal and Vancouver startups service about 20% more customers than Toronto companies according to Startup Compass, giving them far more of a foothold in international markets and a lot of room to grow. In fact, Montreal has the third best global market reach of any startup city. Vancouver is in second place.

Overall, the CVCA said deals jumped from 433 in 2014 to 536 last year. While 38% of the deals were in Ontario, 31% were in Quebec, indicating the French Canadian province was catching up. Of all venture capital and private equity rounds during the year, the top three were in Quebec. Lightspeed POS scored $79 million, Clementua Pharmaceuticals $74 million and Blockstream $73 million. Telesta Therapeutics’ $37 million and Coveo’s $35 million also got Quebec into the Top 10.

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