Canadian VC reaches $9.42B in 2022, 2nd best year since 2017

TORONTO, May 18, 2023 /CNW/ - Canadian venture capital (VC) disbursements¹ reached $9,425 million from 708 financings in 2022. Though a substantial decrease (33%) in disbursements from 2021, the best Canadian VC year in history, 2022 still ranked as the second-best VC year in terms of disbursements.

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

VC Investment Activities Quarterly Trend (CNW Group/CPE Media Inc.)

VC funding sources (who funds Canadian companies)

US and International investors invested $4.24 billion and $1.70 billion, representing 45% and 18% of the total disbursements respectively. Canadian investors invested $3.49 billion for 37% of the total.

VC investors, Canadian and non-Canadian, invested a combined $3.30 billion or 35% of the total disbursements. Specifically, Canadian, US and international VCs invested $2,062 million (22%), $972 million (10%) and $268 million (3%) respectively.

Corporate investors led by US corporate investors invested a combined $2.44 billion (26%), consisting of $1,154 million, $831 million, and $454 million by US, International and Canadian corporation investors respectively.

Family Office investors investing $893 million (9%), comprised of $367 million (Canadian), $289 million (International) and $$237 million (US).

Following VC, Corporate and Family Office investors, Government investors invested $780 million, $774 million (8%) of which by Canadian government investors. 

2022 VC disbursements

Provinces

Ontario, Quebec, and BC companies were the leading recipients of VC disbursements, securing $3.50 billion, $2.45 billion $2.23 billion respectively.

Province	# Fins	$ Millions
Alberta	90	837
British Columbia	155	2,227
Manitoba	4	44
New Brunswick	14	100
Newfoundland and Labrador	1	26
Nova Scotia	29	108
Ontario	276	3,497
Prince Edward Island	2	4
Quebec	116	2,452
Saskatchewan	21	131

Municipal Cities

Companies from 66 municipal cities secured venture capital funding in 2022 with Toronto, Montreal and Vancouver leading with $2.49 billion, $2.10 billion and $1.73 billion respectively.

City	Province	# Fin's	$ Millions
Toronto	Ontario	164	2,485
Montreal	Quebec	86	2,100
Vancouver	British Columbia	113	1,731
Calgary	Alberta	77	746
Waterloo	Ontario	12	292
Ottawa	Ontario	37	252
Quebec City	Quebec	15	245
Mississauga	Ontario	17	208
Victoria	British Columbia	10	201
Kitchener	Ontario	14	138
Saskatoon	Saskatchewan	18	126

Sectors

ICT companies raised $5.13 billion or 54% of the total disbursements. Cleantech² companies secured $1.97 million, ahead of $1.14 billion raised by biotech companies.

Stages

Early stage and growth/late-stage financings raised $5.66 billion and $2.21 billion respectively.

Seed/pre-seed stage financings raised $598 million from 169 financings. Bridge financing raised $442 million from 107 financings.

Company size

Companies with 0-49, 50-99, 100-499 and 500+ employees raised $6.17 billion, $707 million, $2.54 billion, and $10 million respectively.

2022 VC fund fundraising

48 Canadian venture capital funds raised $4.74 billion in 2022. 2 BDC funds (allocated capital) accounted for 19% of the total fundraising by Canadian VC firms.

Type	# Funds	$ Millions
Government Fund	2	900
Corporate VC	1	150
Private VC	41	3,568
Social Impact	2	105
Accelerator Fund	2	21
Total	48	4,744

2022 Leading VC law firms

Dentons Canada LLP led all VC firms in 2022 involving in 114 VC financings.

Law Firm	# Fins	$ Millions
Dentons Canada LLP	114	612
Osler, Hoskin & Harcourt LLP	65	2,137
Fasken Martineau DuMoulin LLP	29	229
Borden Ladner Gervais LLP	19	119
Bennett Jones LLP	14	56
McInnes Cooper	10	9
Blake, Cassels & Graydon LLP	9	261
LaBarge Weinstein LLP	9	43
Burnet, Duckworth & Palmer LLP	9	25
DLA Piper (Canada) LLP	8	45

"2022 reveals the continuing overconcentration of venture capital investment in three provinces, namely Ontario, Quebec and British Columbia which together accounted for 86.7% of all venture capital investment dollars. This situation poses a challenge for government policy makers and their regional development efforts - namely how, or even whether, to promote venture capital investment outside of those three provinces. Another feature revealed by the data is the 20.9% contribution of clean tech which bears watching in light of the federal government 2023 Budget which committed significant policy support to clean tech. Finally, it is notable that 65.4% of all venture capital investment dollars went to the smallest companies (0 - 49 employees), which suggests that scale ups received comparably less support, thus continuing a pattern of underfunding for medium-sized firms," commented Richard Rémillard, President of Rémillard Consulting Group (RCG).

Summary report

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

• Secondary transactions (investor/shareholder exit events) in which companies received no money
• PE transactions
• Financing by foreign headquartered/domiciled companies with Canadian subsidiaries.

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: [email protected]

CPE Analytics

With over 78,700 financing transactions in its Canadian Financings database, CPE Analytics is Canada's leading all financing intelligence provider.  We provide comprehensive, verified, and unbiased information and unmatched insights and intelligence on private and public financings, initial public offerings (IPOs), M&As, professional investment firm fundraising activities.

We cover all aspects of VC information, not limited to but including Canada's only information on VC firm fundraising, VC funding sources (where all the VC came from).

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 the 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/

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^1	CPE Analytics tracks disbursements, money went to the companies (primary funding); we specifically exclude secondary transactions as part of overall funding rounds. For example, we only included US $321 million of 1Password's US $620 million funding round and excluded $299 million secondary transaction with the founders and management. Also noted that 1Password deal was a 2021 deal, not a 2022 financing.
^2	CPE Analytics has re-classified and included advanced agri-tech in cleantech.

SOURCE CPE Media Inc.

Ted Liu, President & CEO, CPE Media & Data Company, 647-782-8818, [email protected]