US and other Foreign Investors Play Dominant Role in $7.54B H1 VC financing

• Ontario regained lead, securing $3.32 billion in total venture capital disbursements, ahead of $2.41 billion received by BC companies
• Toronto and Vancouver raised $2.66 billion and $2.21 billion respectively, together accounting for 65% of total VC disbursements.
• Growth and late-stage financing dominated for the first time in history, raising $3.31 billion, ahead of $3.21 billion raised by early-stage companies.
• ICT companies raised $4.75 billion account for 63% of the total VC disbursement.
• US investors invested $4.37 billion, accounting for 58% of the total disbursements
• Investors from 40 other foreign countries/regions invested $1.11 billion (15%)
• US Private VC, US Corporate VC, US Hedge Fund, US Corporate, Canadian VC, Canadian Institutional VC and Foreign Corporate VC ranked as the leading investors
• Dentons Canada LLP led all VC law firms with 28 VC deals

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

TORONTO, Aug. 23, 2021 /CNW/ - Q2 2021 Canadian venture capital (VC) set a brand-new quarterly record, with $4.59 billion from 166 financings, according to the Canadian Venture Capital Report released today by CPE Analytics, a division of CPE Media & Data Company.

For the first half of 2021 (H1 2021), Canadian VC reported $7.54 billion from 374 financing. The first half VC disbursement amount has already surpassed that of Canadian VC previous best year in 2019 ($7.46 billion).

Ontario regained its lead that it lost to BC in Q1 2021, raising $3.32 billion ahead of $2.41 billion raised by BC companies.

Growth and late-stage financings dominated the first half and for the first time in Canadian history led in total fundraising with $3.31 billion.  In comparison, early-stage companies raised $3.21 billion and seed/pre-seed companies secured $345 million.

ICT companies led all sectors by a wide margin, securing $4.75 billion, almost 4 times of the amount raised by life science companies ($1.20 billion).

After a brief pull-back in 2020, US investors resumed their dominant roles backing Canadian companies, investing $4.37 billion and accounting for 58% of the total VC funding.

US VC invested $2.11 billion accounting for 28% of the total funding source. Non-traditional VC investors such as hedge and mutual funds are increasing their investment pace, investing $1.05 billion or 14% of the total funding.  US hedge and mutual funds alone backed Canadian companies with $876 million (12%).

" This eye-opening data lays bare the dominant role played by foreign, notably US, sources of venture capital in the Canadian market. Given today's global competition between states for technological leadership and the current federal election, it is imperative that this issue be addressed by the major federal parties in the event that Canada finds itself without an autonomous technology sector in critical areas ranging from cleantech to finance," commented Richard Rémillard, President of Rémillard Consulting Group (RCG). "Venture capital clusters in a few of our largest cities, which has important implications for regional economic development. This data reveals the attraction of finance-related investments to venture capital, as this are dwarfs cleantech investments - a supposed public and governmental priority. And, despite all the attention COVID has placed on bio and life sciences, software continues to eat the world (as leading US VC Marc Andreessen put it)."

H1 2021 Canadian Venture Capital Disbursement Highlights

• Companies from 55 cities secured venture capital funding. Top 10 cities with $50 million or more VC funding, Toronto, Vancouver, Montreal, Kitchener, Quebec City, Calgary, Saskatoon, Fredericton, Burnaby, Halifax, collectively raised $7.1 billion or 94% of the total disbursements.
• Atlantic Canada collectively raised $203 million or 3% of total.
• Series A, B, C, D financings raised $1.00 billion, $1.16 billion, $1.46 billion, and $1.47 billion respectively.
• Companies with less than 50 employees raised $3.77 billion or 50% of the total disbursements.

H1 2021 Canadian VC Funding Source Highlights

• Canadian investors contributed $2.06 billion (27%), and investors from USA and 40 other countries/regions combined contributed $5.48 billion million (73%).
• Top 10 funding foreign countries/regions: United States (USA), United Kingdom (UK), Japan, Germany, Virgin Islands British (BVI), Hong Kong, Spain, Singapore, Australia, France.
• Top 10 individual investor types: US Private VC, US Mutual/Hedge Fund, US Corporate, CDN Private VC, CDN Institutional VC Fund, Foreign Corporate, US Angel, CDN Government, Foreign Private VC, CDN Angel.

H1 2021 US and Foreign Investment Regional Breakdowns

• All regions with exception of The Prairies raised over half of the capital from US and foreign investors.
• The Prairies raised 49% of the total capital from US and foreign investors.
• BC attracted the highest share of US and foreign investments with 83% of total raised.
• Quebec attracted substantial high portion of investments from US and foreign investors (65%) in the first half than from all previous years.

H1 2021 Fundraising by Canadian VC Firms

• 38 VC funds raised $2,912 million.

H1 2021 Top VC Law Firms 

• Top five active VC law firms: Dentons Canada LLP, Fasken Martineau DuMoulin LLP, Osler, Hoskin & Harcourt 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 received by companies

Excluded

• Mortgage funding and senior debt as part of an overall funding round (over 90% of Fraction's announced $289 million funding round is mortgage funding, which should NEVER be accounted as VC. In addition, Fraction's financing closed in Q4 2020 not in Q1 2021 as recorded by some date providers).
• Secondary transactions 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: [email protected]

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/

SOURCE CPE Media Inc.

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

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