TMCnet News
Canadian VC investments down sharply in Q2 compared to US VC activitiesUS and International VC funds abandoned Canadian market in Q2, 2022
All dollar ($) figures in Canadian dollar unless otherwise noted. TORONTO, Aug. 18, 2022 /CNW/ - Canadian companies secured $1.17 billion in venture capital funding1 through 127 financings in Q2 2022, down 67% from the amount raised in Q1 2022 and 76% from the amount raised in Q2 2021. For the first half of 2022, Canadian VC disbursements reached $4.72 billion from 299 financings, down 40% from total disbursements in first half 2021. NVCA/PitchBook reported Q2 2022 US activities showed an decrease of 24% from Q1 2022 and 23% from Q2 2021, an decrease of 9% for the first half compared to first half of 2021.
H1 2022 VC funding sources (who funds Canadian companies) US and foreign investors invested $2.62 billion and $689 million or 55% and 15% of the total disbursements respectively. Canadian investors invested $1.41 billion or 30% of the total, up from historical low of 27% recorded in Q1 2022. Top six investor types in H1 2022 were US Private VCs ($1.69 billion), Foreign Corporates ($574 million), Canadian Private VCs ($410 million), US Corporates ($323 million), Canadian Governments ($250 million), and Canadian Corporates ($247 million). Non-traditional VC investors followed with US mutual/hedge funds investing $219 million, Canadian family offices investing $173 million and US family offices investing $151 million. H1 2022 VC disbursements Provinces Alberta and Saskatchewan, only other $100 plus provinces, saw their companies raise $431 million and $118 million respectively. Municipal Cities City of Toronto and City of Montreal companies raised $1.44 billion and $1.22 billion respectively, together accounting for 56% of total disbursements. Sectors Cleantech2 companies raised $603 million (13%) ranking as third active sector. Biotech raised $464 million, continuing to lag behind dropping from its usual 2nd place in all sectors.
Stages Seed/pre-seed stage financings raised $265 million from 67financings representing 22% of total number of financings. Company size H1 2022 VC fund fundraising 21 Canadian venture capital funds, including 19 private, 1 social impact, and 1 corporate funds, raised $1.72 billion in H1 2022. 14 funds raised $758 million in Q2 2022. H1 2022 VC law firms 24 known law firms acted as legal counsels in various capacities for the companies or the investors. Osler, Hoskin & Harcourt LLP, Fasken Martineau DuMoulin LLP, Borden Ladner Gervais LLP, Bennet Jones LLP, and LaBarge Weinstein LLP were the top five VC law firms in number of VC financings. "As expected, Q2, 2022 VC investing volumes were down significantly in Canada. Not only have VC investments fallen dramatically quarter over quarter and year over year in Q2, but the Canadian market has experienced a much sharper downturn than in the US. It is worth noting that the data reveal a much steeper decline in VC investing in Canada on the part of US, particularly, and international funds than that of Canadian funds which has had the effect of boosting the market share of domestic VC investors. This reveals a pattern evident in previous downturns, when US market participants were perceived to have rapidly exited Canada when times got tough. The reliance on US and foreign VC investment, while actively pursued by federal and provincial authorities alike does reveal a strategic vulnerability in the innovation economy that will likely need to be addressed as the peak to trough to peak cycle in VC is likely to be an enduring feature of the asset class. One partial solution, in the eyes of many, has been the potential contribution of corporate Canada to fuelling VC investment volumes. But, as this data set reveals, such an expectation is not likely to be met any time soon given the paltry contribution of the Canadian corporate VC to the overall level of investment," commented Richard Rémillard, President of Rémillard Consulting Group (RCG). Summary report Summary report can be downloaded from financings.ca website: https://www.financings.ca/reports/ Methodology Included
Excluded
Rémillard Consulting Group (RCG) Rémillard Consulting Group (RCG) is a unique, Ottawa-based, bilingual consulting firm specializing in providing private sector, government & trade association clients with creative, research-grounded solutions to business issues and public policies involving the Canadian financial services industry. For more information: [email protected] CPE Analytics With over 65,900 financing transactions and 89,100 data points in its all financings.ca database, CPE Analytics is Canada's leading all financing intelligence provider. We provide comprehensive, verified and unbiased information and unmatched insights and intelligence on private and public financings, initial public offerings (IPOs), M&As, professional investment firm fundraising activities. CPE Analytics is the data analytics division of CPE Media & Data Company. More Info: https://cpeanalytics.ca, https://financings.ca CPE Media & Data Company Founded by Canada's the most experienced private capital and financing research experts, CPE Media & Data Company is Canada's leading all financing news and intelligence provider. More information: https://cpecompany.ca/ SOURCE CPE Media Inc. |