Canadian VC invested hits record high of C$16.2bn in 2021

Canada's venture capital market finished 2021 with a record C$16.2 billion invested in 723 financings, exceeding the totals in 2019 and 2020 combined.

Canada’s venture capital market finished 2021 with a record C$16.2 billion invested in 723 financings, exceeding the totals in 2019 and 2020 combined, according to final data released by Refinitiv. Of the top four quarters ever recorded in terms of disbursements, all four were in 2021. Last year’s explosive activity was driven in large part by mega-rounds, as 42 Canadian technology companies, led by Trulioo, Assent Compliance and Dapper Labs, raised $100 million or greater.

A full PDF report of 2021 Canadian venture capital market activity by Refinitiv is available here.

REPORT SUMMARY

VC INVESTMENT IN CANADA REACHES C$16.2 BILLION

Venture Capital investments in Canada-based companies reached a record high of C$16.2 billion from 723 deals in the full year 2021, an explosive rate of growth, exceeding the total invested in 2019 and 2020 combined. Indeed, of the best four quarters recorded in terms of dollars disbursed to Canadian companies, all four occurred in 2021. Though the number of deals done in Q4 was the lowest of the year, at 158, it still represented the second-best quarter on record in dollar terms.

British Columbia saw some of the greatest increase in VC activity in 2021, with more than triple the dollars invested as compared to 2020, and with 36% more deals. Of all provinces, only three received less capital in 2021, while five provinces more than doubled what they received in 2020.

FOURTY TWO VENTURE INVESTMENTS OVER C$100 MILLION COMPLETED

While 10 venture-stage investments C$100 million or greater, totaling C$1.7 billion, were completed in all of 2020, from January to December last year there were 42 such investments recorded totaling C$7.7 billion. The largest of these included Trulioo with C$476 million, Assent Compliance with C$446 million, and Dapper Labs at C$385 million. Among top investors in Canada companies in 2021, those completing more than 25 Canadian deals included BDC Venture Capital, Real Investment Management, iNovia Capital, and Export Development Canada. Top Canadian investors in deals done abroad included CPPIB and OMERS Ventures.

From January to December, information technology companies secured C$12.7 billion, which was more than the previous three years combined. Life sciences companies completed rounds totaling C$1.6 billion, up 55% over 2020, and other traditional sector companies accounted for the balance.

CANADIAN VENTURE CAPITAL FUNDRAISING REACHES NEW HIGH

Venture capital fundraising in Canada in 2021 also set new historical records, with C$5.2 billion raised in 46 funds, edging out the second-strongest year for Canadian VC fundraising, with C$4.9 billion raised in 2019. The last year in which more funds held a closing was 2004.

CANADIAN VENTURE CAPITAL-BACKED EXITS REACH RECORD HEIGHTS

Canadian venture backed exits totaled C$17.4 billion from January to December in 95 deals, while Q4 saw C$7.3 billion in 31 deals, the strongest quarter on record in dollar terms, and the second strongest in terms of exit volumes since Q4 2000. The 2021 calendar year saw seven exits over $1 billion, including Verafin at C$3.6 billion, Sonder at C$2.6 billion, and Trillium Therapeutics at C$2.5 billion, as reverse takeovers became a more prevalent exit technique.