TORONTO, Nov. 27, 2019 /CNW/ - Canadian venture capital (VC) disbursements are continuing red-hot record-setting pace, completing 452 financings totalled $5.1billion (excluding Verafin deal1) in the first three quarters (3Qs) of 2019, according to the results released today by CPE Media Analytics, the data analytic service of CPE Media Inc.
"Canadian VC disbursements are on a historical record setting pace for the first three quarters of 2019. At the midpoint of Q4, 2019, total VC disbursements were already tracked at $6.1 billion; 2019 is posed to best the $6.5 billion record reported in 2000. With continuing and unabated investments from US and foreign investors, 2019 is truly shaping up to be a record year for the Canadian venture capital industry," said Ted Liu, President of CPE Media Inc. "As Canada's only complete VC data provider, we are focused on providing accurate and comprehensive information not only on information where the VC money went to, but on fundamental information where the VC money came from, so industry stakeholders can have better intelligence and understanding about the ever evolving and changing Canadian VC ecosystem."
"The data reveal many continuing trends, including the growing presence of foreign, largely US investments and the increasing prominence of larger funding rounds. The overall strength in investing and fundraising volumes in Canada largely mirrors the pattern of activity elsewhere, including the US and speaks to the full onset of the fourth industrial revolution globally," commented Richard Remillard, President of Remillard Consulting Group (RCG).
First nine months, 2019 - Venture Capital disbursements (where all the funding went - to companies, not to investors in secondary transactions or recaps)
- 452 financings totalled $5,068 million, up 28% and 48% respectively in total number of financings and total amount from the same period last year.
- 24 large deals with deal value of $50 million or more attracted $2,523 million or 50% of the total disbursements.
- Ontario led all provinces with $2,055 million (41%), followed by BC ($1,337 million), Québec ($1,328 million), Alberta ($150 million) and Nova Scotia ($54 million).
- City of Toronto led all municipal cities with $1,451 million (29%), followed by Vancouver ($1,068 million), Montréal ($1,057 million), Laval ($157 million) and Ottawa ($150 million).
- Series B deals secured $1,303 million, representing 26% of the total disbursements.
- ICT and biotech companies raised $3,099 million (61%) and $1,136 million (22%) respectively.
- Early stage companies raised $2,878 million or 57% of the total disbursements.
- Small sized companies with the number of employees under 50 were the largest recipients of VC disbursements for the past three years, accounting for 48%, 49% and 48% of the total disbursements respectively.
First nine months, 2019 - Venture Capital funding sources (where all the funding came from)
- Canadian companies secured funding from investors from 38 countries or overseas territories.
- US investors' share of the total disbursements for the first time reached 50%, up from 42% in 2018 and 46% in 2017.
- US and other foreign investors combined contributed 61% (2019), 58% (2018) and 65% (2017) of the total disbursements.
- Top five investor types: Private VC funds - $2,180 million (43%); Corporate - $936 million (18%); Family Offices - $491 million (10%); Angels - $293 million (6%) and Government – $289 million (6%).
- Top five individual investor types: US Private VC - $1,615 million (32%); Canadian Private VC - $466 million (9%); US Corporate - $407 million (8%); Canadian Institutional VC – $408 million (8%); Canadian Government - $288 million (6%).
First nine months, 2019 - USA and Foreign Investment Breakdowns
- BC companies attracted the largest share of overall disbursements from US investors with $828 million or 62% of total disbursements to all BC companies. 78% of the total disbursements in BC were contributed by US and other foreign investors.
- US investors contributed 48% of Ontario $2,005M total disbursements.
- The Prairies attracted least amount of US and other foreign investors, securing 47% of the total disbursements in the Prairies.
- Out of the $1,303 million raised by Series B financings, 59% came from US investors and 8% from other foreign investors.
- Out of the $3,099 million raised by ICT companies, 52% came from US investors and 8% from other foreign investors.
- Out of the $1,135 million raised by Biotech companies, 63% from US investors and 10% from other foreign investors.
Fundraising by Canadian venture capital firms and others
- 49 funds2 raised $3.6 billion, of which $2,327 million by 31 private VC funds.
- Top IPOs: Lightspeed POS Inc. (TSX: LSPD) - $276M with valuation of $1.4B; Milestone Pharmaceuticals Inc. (NASDAQ: MIST) – US $95 million with US $402 million valuation.
- Top M&As: Wave HQ acquired by H&R Block for US $407M; Aeryon Labs acquired by FLIR Systems for US $206M; Mnubo acquired by Aspen for CDN $102 million.
- Top five active VC law firms: Osler, Hoskin & Harcourt LLP, Fasken Martineau DuMoulin LLP, LaBarge Weinstein LLP, Burstall LLP, Dentons Canada LLP
Full report can be downloaded from financings.ca website: https://www.financings.ca/reports/
About CPE Media Analytics, a service of CPE Media Inc.
Backed with over 25 years of private capital research experience, CPE Media Analytics, through financings.ca, offers verified and comprehensive data coverage and analysis on venture capital and private and public capital. We are Canada's only data provider that specifically tracks and provides complete venture capital information, including fundamental information on where VC money came from (by investor types and by geographic sources), and VC firm fundraising. https://financings.ca
About CPE Media Inc.
CPE Media Inc. is Canada's all financing, private capital and public market, news and intelligence provider. We provide trusted, unbiased and verified, private and public market news and intelligence to all industry stakeholders. For more information: https://cpemedia.ca.
The $515 million Verafin recapitalization backed by senior secured debt is not a venture capital deal. The deal was a recap in which new equity from a new group of investors/funds together with leveraged senior debt, secured by their equity stakes, was used to buy out a previous group of investors/funds (an exit event for previous investors).
Fund of Funds fundraising is excluded to eliminate double counting, as many of the Private VC funds are raising large portion of their capital from Fund of Funds.
SOURCE CPE Media Inc.