US investors were back in force in Q4, propelling 2020 to be the second best year since 2017
City of Toronto was only $1B VC city in 2020 with $1.18B
US Private VC was the top leading investor type, 2.25 times of the second leading type, Canadian Private VC
US, UK, South Korea, China, Netherlands rounded up the top 5 foreign funding sources
Dentons Canada LLP was the top VC law firm with 77 VC deals
TORONTO, March 1, 2021 /CNW/ - Driven by renewed US investments in Q4 2020, Canadian venture capital disbursements reached $5.3 billion in 2020. Despite the COVID-19, 2020 was second-best year since 2017, behind 2019 the record year of $7.5 billion. (All amounts in Canadian dollars unless otherwise stated)
According to the Canadian Venture Capital Report released today by CPE Analytics, 610 financing rounds closed in 2020 for total disbursement of $5.3 billion, down 12% and 29 % respectively from 2019.
"This comprehensive data set amply demonstrates that venture capital investing and fundraising follow a different rhythm than that of the overall economy, with a significant bounce back in Q4 resulting in a better-than-expected full year result for this asset class. The data also reveal how reliant Canadian portfolio companies are on the 'swing' investors from the US - investors who returned to Canada in numbers in Q4. The data further highlight the weaknesses in several provinces, notably Québec a province which suffers from a relative US investment deficit vis-à-vis neighboring Ontario. Finally, while 11 cities have joined the $100M plus club, the data starkly reveals the difficulties rural and smaller town Canada face in attracting VC investment, which is rife with implications for a countrywide, fulsome recovery from the economic effects of COVID," commented Richard Rémillard, President of Rémillard Consulting Group (RCG).
2020 Canadian Venture Capital Disbursement Highlights
(additional analysis can be found in CPE Analytics summary report)
- Ontario led all provinces with $2,284 million, BC became second VC destination with $1,216 million, Quebec was relegated to third with $1,096 million.
- Toronto is the only $1 billion VC city in 2020, compared to 3 cities in 2019. The top 11 cities with $100 million more VC funding, Toronto, Vancouver, Montreal, Kitchener, Quebec, Calgary, Edmonton, Mississauga, Burlington, Burnaby, Ottawa, collectively received $4.63 billion or 87% of the total disbursements.
- ICT companies raised $2,819 million or 53% of total. Biotech companies received $1,526 million or 29% of total, up from 22% in 2019. Cleantech companies raised $422 million or 8% of the total, unchanged in the share of total in 2019.
2020 Canadian VC Funding Source Highlights
(Canada's only data source on VC funding sources)
- US investors ramped up their investments in Q4, bringing their share of total funding to 40%, up from 31% for the first nine months of 2020.
- Canadian investors contributed $2,554 million (48%), US investors contributed $2,137 million (40%), while investors from 46 other countries/regions contributed $612 million (12%).
- US, United Kingdom, South Korea, China, The Netherlands were the top 5 foreign funding sources.
- US Private VCs invested $1,265 million more than double that of Canadian Private VCs ($561 million). Other top types of investors include Canadian Corporate ($507 million), Canadian Governments ($356 million) and US Corporate ($335 million).
2020 US and Foreign Investment Regional Breakdowns
- BC, Western Canada companies attracted disproportionally large share of their total funding from USA/foreign investors with 75% and 63% respectively.
- Quebec and Atlantic companies attracted the least USA/foreign investments, with shares of 25% and 26% of the total funding respectively.
- US/Foreign investment share in Ontario companies was down from 54% in 2019 to 51% in 2020.
2020 Fundraising by Canadian VC Firms
- 24 VC funds raised $2,831 million.
2020 Top VC Law Firms
- Top five active VC law firms: Dentons Canada LLP, Osler, Hoskin & Harcourt LLP, Fasken Martineau DuMoulin LLP, LaBarge Weinstein LLP, Blake, Cassels & Graydon LLP
The full summary report can be downloaded from financings.ca website: https://www.financings.ca/reports/
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: https://remillardconsulting.com/
CPE Analytics
CPE Analytics is Canada's leading financing information and intelligence provider. We provide comprehensive and unbiased information and unmatched insights and intelligence on public financings, private financings (venture capital, angel, private equity and other private financings), initial public offerings (IPOs), M&As, professional investment firm fundraising activities.
We keep the pulse of Canadian public and private capital financings.
CPE Analytics is the data analytics division of CPE Media Inc. More Info: https://cpeanalytics.ca, https://financings.ca, https://cpemedia.ca/
SOURCE CPE Media Inc.
Ted Liu, President, [email protected], 647-782-8818
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