Canadian tech companies raise $5bn in VC in first nine months

Venture capital investment in Canada remained strong in the first nine months of 2020, with C$5 billion deployed across 468 financings, according to final data released by Refinitiv.

Venture capital investment in Canada remained strong in the first nine months of 2020, with C$5 billion deployed across 468 financings. This marked the second most active first three quarters in dollar terms on record, final data released by Refinitiv show. Despite this, the third quarter saw the value of financings drop 51 percent relative to 2019 figures and volumes drop 4 percent. Canadian investors were responsible for 61 percent of funding at the end of September, up from 45 percent in all of 2019 and marking their highest level since 2012.

 A full PDF report of Q3 2020 Canadian venture capital market activity by Refinitiv is available here.

REPORT SUMMARY

Canadian venture capital totaled $5.0 billion invested across 468 rounds in the first nine months of 2020. Investment values saw a year-over-year decrease of 11% but still remained the second strongest first nine months on record. Volumes were up 1% from the previous year and reached their highest level since the 490 rounds in the first three quarters of 2005.

At the top of the list of rounds newly added in the third quarter was the $90 million funding provided to Ontario-based IVF clinic partnership, The Fertility Partners, led by Peloton Capital Management and Heal Partners Trust. Others included the $75 million investment into VC-backed telemedicine company Maple Corp by Loblaw’s Shoppers Drug Mart business, and a $66 million funding round provided to Alberta-based 3D robotics supply chain company, Attabotics, by Ontario Teachers’ Innovation Platform and Honeywell. No venture capital rounds surpassed the nine-figure mark between July and September, keeping this total to seven rounds worth $1.1 billion.

Companies based within Ontario had $2.1 billion invested across 199 rounds, resulting in 8th place for dollar values and 4th place for volumes in the North American provincial & state rankings. Dollar values for the province were down 1% from the first nine months of 2019 while transaction volumes were up 6%. Québec followed with $1.4 billion invested across 128 deals for dollar and volume rankings of 13th and 7th place, respectively, and a year-over-year increase of 8% in values and decrease of 7% in volumes. Companies within British Columbia saw their level of overall investment drop 27% to $999 million across 73 rounds in 2020, resulting in an 18th place value ranking and 11th place volume ranking.

Domestic funds invested $2.4 billion in Canadian companies through the end of September, a 61% share of all disclosed financing. This was up from the 45% throughout the entirety of 2019 and higher than any annual share since 2012. Funds located within the United States supplied only 33% of funding during the period, lower than any annual share since the 29% in 2012.

A total of 17 Canadian VC funds recorded closes during the first three quarters, raising a combined $1.9 billion in commitments, a decrease of 47% compared to a year ago but still the fourth strongest first nine months on record. Only a single fund completed a raise during the third quarter, with Brightspark Ventures bringing in $61 million of commitments for its Canadian Opportunities Fund towards a target of $75 million.

Canadian companies completed 36 VC-backed exits worth $1.0 billion, a 48% decline in values and a 5% drop in volumes relative to the first nine months of 2019. The top three exits remained the three IPOs held in the second quarter of the year, those of oncology drug developers Repare Therapeutics and Fusion Pharmaceuticals which saw proceeds of $344 million and $290 million, and that of legal and business tech provider Dye & Durham, which saw proceeds of $173 million.