Canadian tech companies secure record $3.6bn of VC in H1

Venture capital investment in Canadian technology companies was robust in the first half of 2020, with $3.6 billion deployed to 302 financings, according to Refinitiv data.

Venture capital (VC) investment in Canadian technology companies was robust in the first half of 2020, with $3.6 billion deployed to 302 rounds. This marked the most active first half in dollar terms on record, final data released by Refinitiv show. The number of financings remained steady in the first half, declining only 1 percent compared to the same time in 2019. In Q2 2020 alone, $1.9 billion was invested across 157 rounds, representing the third strongest quarter in dollar terms on record (after Q4 2000 and Q3 2019).

A full PDF report of H1 2020 Canadian venture capital market activity by Refinitiv is available here.

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Canada venture capital investment totals $3.6 Billion in H1

Canadian venture capital totaled $3.6 billion invested across 302 rounds in the first six months of 2020. Despite volumes declining 1% year-over-year, investment values saw an increase of 28% and it was the strongest first half ever recorded. The $1.9 billion invested across 157 rounds in the second quarter alone marked the third strongest quarter on record, only behind $2.1 billion in Q4 2000 and $2.8 billion in Q3 2019.

Four venture capital rounds surpassed the nine-figure mark between April and June, bringing the total to seven rounds worth $1.2 billion in the half. Topping the list for those newly added was the $211 million funding round provided to Kitchener-based online student recruitment platform, Applyboard, led by Drive Capital and joined by Business Development Bank of Canada, Anthos Capital, Artiman Ventures, Fidelity Investments, and Garage Capital. Publicly-listed residential property services business, FirstService Corporation, also raised $210 million in a private placement sold to United States-based venture firm Durable Capital Partners in order to accelerate growth and pay existing obligations. Completing the top three for the quarter was the $144 million investment into Vancouver-based biotechnology firm AbCellera, led by OrbiMed and Data Collective with additional participation from Founders Fund, Presight Capital, Eli Lilly and Company, Peter Thiel, Viking Global Investors, and the University of Minnesota.

Companies based within Ontario saw $1.5 billion invested across 119 deals, resulting in 6th place for dollar values and 4th place for volumes in the North American provincial & state rankings. Quebec followed closely behind with $963 million financed across 86 deals for dollar and volume rankings of 9th and 6th place, respectively. Companies within British Columbia saw their share of overall investment rise from 19% in the first half of 2019 to 22% in 2020, with 55 rounds totalling $792 million in the period.

Domestic funds invested $1.8 billion in Canadian companies through the end of June, a 62% share of all disclosed financing. This was up from the 45% throughout the entirety of 2019 and higher than any annual share since 2012. As a result, funds located within the United States supplied 34% of funding during the half, lower than any annual share since 28% in 2012.

A total of 14 Canadian VC funds recorded closes during the first half, raising a combined $1.9 billion in commitments, a decrease of 36% compared to a year ago but still the third strongest first half on record. OMERS Ventures led the way with $1.1 billion in commitments for its fourth flagship fund, a transatlantic fund which will focus primarily on fintech, healthtech, proptech, logistics tech, and workplace technology businesses. Georgian Partners also collected $151 million of additional commitments for its Growth Fund V, bringing total fund commitments to $1.1 billion.

Canadian companies completed 21 VC-backed exits during the quarter worth $634 million, a 22% decline in the number of exits and 52% drop in values when compared to the first half of 2019. The top three exits were all IPOs held in the second quarter of the year, including those of oncology drug developers Repare Therapeutics and Fusion Pharmaceuticals which received $344 million and $290 million of proceeds, respectively. Legal and business tech provider, Dye & Durham, also saw proceeds of $173 million from its June listing.