Activity in the Québec venture capital market up sharply, with first-quarter investments more than quadrupling

MONTREAL, May 16, 2013 /CNW Telbec/ - The year 2013 got off to a roaring start for the venture capital (VC) industry in Québec, with an excellent first quarter marked by investments totalling $227 million, more than four times the $54 million invested in the first quarter of 2012. The clean technologies sectors showed exceptional strength, along with life sciences among the non-technology sectors. These observations are contained in the 2013 first-quarter report on activity in the venture capital industry, compiled by Thomson Reuters and published today by Réseau Capital.

"In a single quarter, investments in the Québec VC market matched what was invested in six months in the previous year," says Jack Chadirdjian, President and Chief Executive Officer of Réseau Capital. "This recovery was anticipated because of the large amounts raised in 2012, which is excellent news for our Québec companies seeking financing to back their growth and innovation."

A resurgence of VC investments
Dollars invested in Q1 2013 were up 51% compared to the $150 million invested in the previous quarter (Q4 2012). The number of Québec companies financed also rose, to 48 firms compared with 39 in Q1 2012. A number of major deals contributed to the sharp rise in investment, including $38 million in financing to Boucherville-based Distech Controls and $13 million to Lachine-based Bariatrix Nutrition. The average amount invested per company climbed to $4.7 million in Q1 2013 from $1.4 million a year earlier.

Québec leads in most key indicators of Canadian activity, notably with 49% of the dollars invested across the country, up from 28% for 2012 as a whole. Québec also dominates in the number of firms financed, with 35% of the Canadian total in Q1 2013. Overall, the Canadian market saw a 55% rise in investments compared to last year. The United States, meanwhile, experienced a 6% decline in investments between January and March, with a total of US$5.9 billion.

Clean technologies take the lead
Alternative energy and other "cleantech" sectors took the lion's share (58%) of dollars invested in the first quarter, in contrast to what prevailed in 2012, when clean technologies were near the bottom. In Q1 2013, eight companies in these areas of activity obtained $132 million, handily exceeding the $19 million invested in these sectors for all of 2012. Among the non-technology sectors, the biopharmaceutical and other life sciences sectors took second place, with $30 million invested in seven companies, more than triple the $9 million invested a year ago. Information technologies accounted for a relatively modest 4% of the total, though the amount invested were up 55% over the same period last year. Finally, companies in late-stage development benefited the most from investments in Q1 2013, accounting for more than three-quarters of the dollars invested.

Fund-raising slows
Unlike deal-making activity, Canadian VC fund-raising activity showed less vigour, with a total of $318 million in new capital committed in Q1 2013, down 44% from $676 million in the same period last year. Private funds accounted for $193 million of the new commitments, while retail funds were responsible for much of the balance in new capital committed in this period, at $176 million.

"We are seeing the pendulum swing back, with 2012 having been unusually strong in terms of fund-raising," Mr. Chadirdjian adds. "This injection of new money has been highly beneficial, stirring a major investment wave in the first quarter of the current year."

About Réseau Capital
Réseau Capital, founded in 1989, is the only private-equity association that brings together all stakeholders involved in the Québec investment chain. The mission of Réseau Capital is to contribute to the development and efficient operation of the private-equity industry, which plays a major role in the development and financing of businesses in Québec. Réseau Capital has more than 425 members representing private-equity, tax-advantaged and public investment companies, as well as banks and insurance companies, accounting and law firms, angel investors, and many professionals working in the field.

SOURCE: Réseau Capital

Source:        
Jack Chadirdjian
President and CEO
Réseau Capital

For information:
Josée Massicotte
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Valérie Gonzalo
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