CVCA Report: Venture Capital Market Activity (Views: 2862)
Wed, 11 Feb 2015
The Canadian Venture Capital and Private Equity Association has released their 2014 report on the Venture Capital Market in Canada. 2014 was a worthy year for Canadian companies as 379 venture capital deals were made totalling $1.9 billion. In addition, there were 296 private equity deals with $41.2 billion invested.
The top private VC firm was Real Ventures with 42 deals a value of $123.6 million and the top Government or other VC fund type was BDC Capital Inc. with 102 deals investing $426.1 million.
A total of 33 VC funds raised $1.166 million in 2014. Individual investors (42%) were the main source of VC fundraising followed by the Government (22%) and Corporation/Financial Institutions/Insurance (10%).
VC investments varied across all provinces and in many different industry sectors. Here is the breakdown:
The largest share of investments were made in Ontario with 154 deals with $932 million of invested VC. Following closely behind were Quebec and British Columbia with 87 deals ($295M) and 72 deals ($554M), respectively. ICT was the top VC sector accounting for 63% of all deals with a total of $1.27 billion. The rest of the deals were mainly divided between the Life Sciences (18%) and Cleantech (9%) sectors.
The companies with the top VC deals were all based in Ontario, Quebec or British Columbia, highlighting these provinces’ strong dedication and support towards the growth of the entrepreneurial sector. Ontario based D2L Inc completed the highest deal at $91.3 million, followed by HootSuite Media Inc. (BC) at $66.5 million and D-Wave systems inc. (BC) at $61.8 million.
The top private VC firm was Real Ventures with 42 deals a value of $123.6 million and the top Government or other VC fund type was BDC Capital Inc. with 102 deals investing $426.1 million.
A total of 33 VC funds raised $1.166 million in 2014. Individual investors (42%) were the main source of VC fundraising followed by the Government (22%) and Corporation/Financial Institutions/Insurance (10%).
One can positively state that 2014 was a relatively successful year for Canadian startups, although a gap still remains in the funding ecosystem. 2015 has started off on the right foot, 35 deals have already been announced in January, the entrepreneurial community can only hope the gap between early stage and later stage funding diminishes.
Mid-stage funding is rare in Canada as many of the funding invested in early stage businesses cannot support the company through its later rounds of funding. On average, these funds only invest about $2 million, a long shot from the amount mid-stage companies need to sustain themselves. Only the lucky few such as D2L Inc. and Hootsuite Media Inc can make it to later stage funding where it is reasonably healthy.
One thing that could accelerate Canada’s progress in mid-stage funding is the Venture Capital Action Plan (VCAP), announced federally two years ago. This fund will channel money into partner organizations, to fund emerging innovative firms and potentially close the gap.
To access the full CVCA venture capital market activity report, click here
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