Q1 2020 Canadian VC at $1.36B, Canadian investors lead

TORONTO, June 17, 2020 /CNW/ - 126 venture capital (VC) financings completed in Q1 2020, raising $1.36 billion, according to the Canadian Venture Capital Report released today by CPE Analytics, a data analytics division of CPE Media Inc. (All amounts in Canadian dollars unless otherwise stated)

COVID-19 impact on Canadian VC  

COVID-19 impacts on Q1 2020 VC investments (CNW Group/CPE Media Inc.)

2019 was a record year for Canadian VC disbursements. Canadian venture capital investment was in optimistic mode. COVID-19 has changed everything and 2020 is unlikely to match 2019.

As deals have already closed or were in the process of being closed prior to the outbreak of the pandemic in Canada, COVID-19 had limited impact to Q1 2020 activities.   

The VC investment activities in Q1 represent decreases of 26% and 10% respectively in the number of financings and total amount from that of Q1 2019, total amount was down 36% from $2.05 billion recorded in Q4 2019. Taking into account that Q4 and Q3 were on record the best quarterly disbursement in Canadian history, the decrease is not that dramatic.

Based on incomplete data, investment activity of April 2020 is on its way to overtake that of April 2019, May and June are way down. The full impact of COVID-19 will likely manifested itself in Q2 and beyond.

Companies are continuing to make long delayed funding announcement, making measurement of COVID-19 difficult. CPE Analytics strives to verify and confirm the accurate closing date and be sure to check our quarterly findings for 2020 for the true impact of COVID-19.

"One seeming strength of the Canadian VC market has been the diversity of funding sources, which have included substantial participation from US and foreign institutions as well as corporates. In the wake of COVID-19, it is uncertain whether or not these elements of the Canadian VC market will continue to play a comparably important role going forward which could have direct consequences for the funding of Canada's most promising firms," commented Richard Rémillard, President of Rémillard Consulting Group (RCG).

Q1 2020 - Venture Capital disbursements - where the funding went  

• 5 large deals with deal value of $50 million or more attracted $624.7 million or 46% of the total amount.
• Top three provinces: Ontario ($636.6 million), Quebec ($359.2 million) and BC ($275.9 million), representing 47%, 26% and 20% of the total amount respectively.
• Top million-dollar cities: Toronto ($303.0 million), Quebec City ($270 million), Vancouver ($230.9 million), Kitchener, Ontario ($215.0 million).
• Series A and B financing captured $153.0 million (11%) and $288.5 million (21%) respectively.
• ICT and biotech companies raised $739.4 million (61%) and $354.7 million (26%) respectively.
• Early stage companies raised $739.4 million or 54% of the total amount.
• Companies with the number of employees under 50 raised $629.3 million or 46% of the total amount.

Q1 2020 - Venture Capital funding sources - where the funding came from

• Investors from 23 foreign countries or regions or overseas territories invested in Canadian companies.
• Top 5 countries: Canada ($782.1 million), US investors ($457.2 million), South Korea ($69.0 million), United Kingdom ($14.7 million), China ($10.0 million).
• Top five investor types: Private VC ($452.1 million), Corporate VC ($325.8 million), Private PE ($163.0 million), Institutional VC ($158.4 million), Family Offices ($104.8 million).
• Top five sub investor types: US Private VC ($298.7 million), Canadian PE ($163.0 million), Canadian Corporate VC ($153.0 million), Canadian Institutional VC ($141.1 million), Canadian Private VC ($136.6 million)

Q1 2020 - USA and Foreign Investment Breakdowns

• Prairies (driven by one large deal) and BC companies attracted largest US and foreign share of the total amount – 95% and 63% respectively.
• Quebec and Atlantic Canada companies attracted least US and foreign shares with 6% each of the total amount.
• Ontario companies attracted 48% share of US and foreign investments.

Q1 2020 - Fundraising by Canadian venture capital firms

• 7 Private VC funds raised $1,372 million.

Q1 2020 - Active VC law firms 

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

The full report can be downloaded from financings.ca website:  https://www.financings.ca/reports/

About 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/

About CPE Analytics

CPE Analytics is a provider of comprehensive and unbiased and verified information on Canadian venture capital and all financing activities.

CPE Analytics is Canada's only data provider that actively tracks and provides analysis on where the Canadian venture capital funding came from - by investor type and by provinces, countries or regions - an essential information for truly evidence-based policy analysis and decision making, and the true understanding of the Canadian venture capital ecosystem. 

CPE Analytics is a division of CPE Media Inc.

For more information: https://cpeanalytics.ca, https://financings.ca

SOURCE CPE Media Inc.

Ted Liu, President, [email protected], 647-782-8818