US VCs and Hedge Funds propel first 9-month Canadian VC to new record $10.7B

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  • Investors from US and 46 foreign countries/regions invested $7.96 billion or 74% of total disbursements. US investors alone invested 57%.

  • US VCs and US Hedge Funds led all investor types with $2.91 billion (27%) and $1.07 billion (10%) respectively. Canadian VCs and Foreign Corporate VCs invested almost identical amount ($990 million vs $989 million) accounting for 9% each of the total disbursements.

  • Top Provinces: Ontario ($4.66 billion), BC (43.23 billion), Quebec ($1.86 billion), Alberta ($0.42 billion).

  • $500 million plus cities: Toronto ($3,708 million), Vancouver ($2,846 million), Montreal ($1,518 million), Kitchener, Ontario ($528 million).

  • Early and late/growth stage financings dominated disbursements, securing $5.03 billion and $4.30 billion.

  • Pre-seed/seed financings remain strong accounting for 24% of total number of financings, highest since 2017.

  • ICT and Biotech companies raised $6.82 billion and $1.57 billion accounting for 64% and 15% of the total disbursements respectively.

  • Osler led all VC law firms with 30 VC deals with total deal value worth $2.39 billion

All dollar ($) figures in Canadian dollar unless otherwise noted.

TORONTO, Dec. 1, 2021 /CNW/ - With strong backing of American VC and hedge/mutual funds, Canadian venture capital disbursements continue to set new Canadian record. 538 financings completed in the first nine months, raising $10.7 billion by Canadian companies, according to the Canadian Venture Capital Report released today by CPE Analytics, a division of CPE Media & Data Company.

CPE Analytics, a division of CPE Media & Data Company logo (CNW Group/CPE Media Inc.)
CPE Analytics, a division of CPE Media & Data Company logo (CNW Group/CPE Media Inc.)

First Nine Months 2021 Highlights

The continuing and record-setting Canadian VC disbursement level has been driven primarily by US and foreign investors. For the first nine months of 2021, US investors and investors from 46 countries or regions invested $6.15 billion and $1.81 billion, accounting 57% and 17% of the total disbursements respectively. Pale by comparison, Canadian investors contributed only 26% of the total.

Top 10 funding foreign countries/regions in the first nine months were United States (USA), United Kingdom (UK), Japan, Virgin Islands British (BVI), Germany, Hong Kong, Spain, Singapore, France, and Australia.

US VCs and US Hedge/Mutual Funds led all investor types with $2.91 billion and $1.07 billion respectively, together accounting for 37% of the total disbursements. Canadian Private VC, US Corporate VC, Foreign Private VC, Foreign Corporate VC, Canadian Institutional VC, US Angel, Canadian Corporate VC, Canadian Angel rounded up the top 10 investor types.

Ontario, BC and Quebec were the top VC destinations, securing $4.66 billion, $3.28 billion and $1.86 billion respectively.

Companies from 62 cities secured venture capital funding in the first nine months. The top 10 municipal cities, Toronto, Vancouver, Montreal, Kitchener, Calgary, Quebec City, North Vancouver, Saskatoon, Fredericton (NB), Orleans (ON), collectively raised $9.87 billion or 92% of the total disbursements.

Early stage and growth/late-stage financings led in total disbursements, securing $5.03 billion and$4.30 billion respectively.

Seed/pre-seed financings remain strong, securing $546 million, but accounting for 24% of total number of financings, the highest level since 2017 (31%).

ICT and Biotech companies raised $6.82 billion and $1.58 billion respectively, together accounting for 78% of the total amount. Cleantech companies raised $710 million or 7% of the total.

Companies with 0-49, 50-99, 100-400 and 500+ employees raised $5.65 billion, $1.95 billion, $2.08 billion, and $1.03 billion respectively.

"Globally, there has been a strong revival of VC investing activities and Canada is no exception. Canada's VC market, with its significant foreign investment levels, considerably broader range of investors than historically, rising company valuations, robust VC fund raising and vibrant exit activity all testament to the 'bull market' that has emerged and which COVID merely put on temporary pause before resuming its upward march. Many observers are weighing the prospects for continued growth which does look set to continue for the balance of 2021 and into the first half of 2022," commented Richard Rémillard, President of Rémillard Consulting Group (RCG). " In the wake of COP26 and the severe weather events that are unfolding today, it is surprising that cleantech investing has only managed to attract less than 10% of all VC investing in Canada (and this from mostly public sources). Technology is a key component of Canada's Net Zero by 2050 plan, and, at this rate, Canada will be importing that technology from other countries not developing it itself and exporting abroad."

First Nine Months 2021 US and Foreign Investment Regional Breakdowns

  • All regions raised over 50% of the total disbursements from US and Foreign investors.

  • The Prairies and Quebec were the only two regions raised less than 50% from US investors.

  • BC attracted the highest share of investments from US and foreign investor, with 85% of total amount.

  • The Prairies attracted the least share of investments from US and foreign investors (53%).

First Nine Months 2021 Fundraising by Canadian VC Firms

  • 44 VC funds raised $4,262 million.

First Nine Months 2021 Top VC Law Firms

  • Top five active VC law firms: Osler, Hoskin & Harcourt LLP, Dentons Canada LLP, Fasken Martineau DuMoulin LLP, LaBarge Weinstein LLP, Torys LLP.

Full summary report can be downloaded from financings.ca website: https://www.financings.ca/reports/

Methodology
Included

  • Equity and quasi-equity investments in companies directly.

Excluded

  • Mortgage funding and senior debt as part of an overall funding round.

  • Secondary transactions (investor/shareholder exit events) in which companies received no money

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: rremillard@bellnet.ca

CPE Analytics
CPE Analytics is Canada's leading all financing intelligence provider. We provide comprehensive, verified and unbiased information and unmatched insights and intelligence on public financings, private 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 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/

USA, United Kingdom, Japan, The British Virgin Islands (BVI) and Germany - Top Five Canadian Venture Capital (VC) Funding Sources (CNW Group/CPE Media Inc.)
USA, United Kingdom, Japan, The British Virgin Islands (BVI) and Germany - Top Five Canadian Venture Capital (VC) Funding Sources (CNW Group/CPE Media Inc.)

SOURCE CPE Media Inc.

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