Venture capital investment in Canada was robust in 2020, the covid-19 pandemic notwithstanding, according to a report issued this week by the Canadian Venture Capital and Private Equity Association. In all, C$4.4 billion was invested across 509 financings last year, the second-highest level of annual VC deployment based on CVCA records. Led by investing in information technology sectors, which accounted for 55 percent of all dollar flows, activity was especially resilient in 2020’s second half.
2020 Year in Review: CVCA Venture Capital Canadian Market Overview: VC Investment in 2020 closes at CAD $4.4B – Lower than 2019 but the Second Highest on Record
March 22, 2021 – Toronto, ON – The Canadian Venture Capital and Private Equity Association (CVCA) today released its newly redesigned year-end report focused on Canadian venture capital. Amid the COVID-19 pandemic, VC investment in 2020 was the second-highest level of annual VC investment based on existing CVCA records, with CAD $4.4B across 509 deals, second only to 2019. Total dollars invested in 2020 was higher than the five-year average ($3.8B and 517 deals in 2015-2019) with a lower number of deals.
The momentum of VC-backed exits is on track relative to previous years, with a total of 38 exits in 2020, which is only slightly below the 5-year average of 40 exits. BC-based biotech company Abcellera was the largest exit in 2020, listing on NASDAQ with a market cap of $6.7B, making it the largest exit on record. Also notable is the Newfoundland-based fintech company Verafin acquisition by Nasdaq Inc. which was announced in Q4 2020 for $3.49B CAD.
“The second half of 2020 has demonstrated a real resiliency in the venture capital market,” said Kim Furlong, Chief Executive Officer, Canadian Venture Capital and Private Equity Association. “The long-term health of the Canadian innovation ecosystem, including venture investment, is critical as we continue to navigate the impacts from the COVID-19 pandemic. It is imperative that we continue to grow the capital available to Canadian entrepreneurs. Venture capital is vital to Canada’s economic recovery and future growth.”
Information communications technology (ICT) companies received the majority (55%) of total VC dollars invested in 2020 (CAD $2.4B over 284 deals) while life science companies received 26% of dollars invested (CAD $1.1B over 89 deals) and clean tech companies received 2% (CAD $101M over 22 deals).
In partnership with Prospect, the CVCA is pleased to include employment numbers once again for VC-backed companies in Canada. A total of 26,277 people were employed by VC-backed companies as of Q4 2020. These employment numbers represent only those positions in VC-backed companies that received VC funding as of Q4 2020. Prospect is a free and fully aggregated talent network built by-and-for the Canadian tech startup ecosystem.
Access the full Canadian Venture Capital and Private Equity Market Overviews Here.
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