VENTURE CAPITAL CANADIAN MARKET OVERVIEW
// Q1 2020
VENTURE CAPITAL CANADIAN MARKET OVERVIEW // 2019 | 2
source:
CONTENTS
PARTICIPATING DATA CONTRIBUTORS .......................................................................3 FOREWORD ......................................................................................................................4 VENTURE CAPITAL HIGHLIGHTS ..................................................................................5 DATA VISUALIZATIONS ...................................................................................................6 VENTURE CAPITAL HEAT MAP ................................................................................................................. 6 QUARTER-OVER-QUARTER VC INVESTMENT ACTIVITY ................................................................. 7 VC ACTIVITY BY DEAL SIZE ...................................................................................................................... 8 TOP 10 DISCLOSED CANADIAN VC DEALS...........................................................................................9 TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES ............................................................. 10 VC SECTOR BREAKDOWN ....................................................................................................................... 11 VC STAGE BREAKDOWN .......................................................................................................................... 12 VENTURE DEBT HEAT MAP ..................................................................................................................... 13 VC EXITS ....................................................................................................................................................... 14MOST ACTIVE VC FIRMS // FUNDS ....................................................................................................... 15
VENTURE CAPITAL METHODOLOGY ........................................................................ 16 AUTHORS, ABOUT CVCA AND CONTACT INFO ...................................................... 17
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // Q1 2020 | 3
If you would like to have your firm included in future reports, please contact [email protected]
CVCA thanks the following firms who participated in its Q1 2020 survey.
PARTICIPATING DATA CONTRIBUTORS
7 Gate Ventures
AmorChem Fund
Amplify Capital
Amplitude Ventures
Anges Quebec
Anges Quebec Capital
Arctern Ventures
AVAC Ltd.
BCF Ventures
Brightspark Capital
CIBC Innovation Banking
Clanton Capital Inc.
Conexus Venture Capital
CTI Life Sciences
Cycle Capital Management/EcoFuel
Dash40 Ventures
Emerald Technology Ventures
Espresso Capital Ltd.
Evok Innovations
Ferst Capital
Fight Against Cancer Innovation Trust
First Ascent Ventures
Fonds Innovexport
Framework Ventures
Freycinet Ventures
Good News Ventures
GreenSoil Investments
Highline Beta
iGan Partners
Information Venture Partners
Innovacorp
inovia Capital
Island Capital Partners
Klass Capital
Luge Capital
Lumira Ventures
MaRS IAF
McRock Capital
Mistral VP
NAventures (National Bank of Canada)
New Brunswick Innovation Foundation
OMERS Ventures
Ontario Capital Growth Corporation
Panache Ventures
Pangaea Ventures
Portag3 Ventures
Quantius
Quark Venture
Radical Ventures
Real Ventures
Relay Ventures
Renewal Funds
Ripple Ventures
Roadmap Capital
Round 13
Ryerson Futures
Sectoral Asset Management Inc.
Tactico Inc.
Tandem Expansion
TandemLaunch
TELUS Ventures
Top Renergy
TVM Life Sciences
V3-Ventures
Vanedge Capital Partners
Venbridge Ltd.
VentureLink Funds
Versant Ventures
White Star Capital
Whitecap Venture Partners
Venture Capital Firms32 Degrees Capital
ARC Financial
Ardenton Capital Corporation
BDC Growth Equity
BDC GTC
BMO Capital Partners
Bond Capital
CAI Capital Partners
Canadian Business Growth Fund
Capital Financière Agricole
Clairvest Group Inc.
Clearspring Capital Partners
Credit Mutuel Equity
First West Capital
Founders Group of Food Compa-nies Inc.
Fulcrum Capital Partners
Highland West Capital
InstarAGF Asset Management
Ironbridge Equity Partners
Kayne Capital
Killick Capital Inc.
m2s Capital
Mink Capital
Mosaic Capital Corporation
Novacap Management Inc.
PenderFund Capital Management
Persistence Capital Partners
PFM Capital Inc
PRIVEQ Capital Funds
Regimen Equity Partners
Seafort Capital
Swander Pace Capital
Tricor Pacific Capital Ltd.
TriWest Capital Partners
Vistara Capital Partners
Westcap Mgt. Ltd
Western Investment Company of Canada Limited
Private Equity & LSVCC FirmsAlberta Enterprise Corporation
Alberta Teachers’ Retirement Fund (ATRF)
BDC Capital
Bluesky Equities
Caisse de dépôt et placement du Quebec
Dancap Private Equity Inc
Desjardins Capital
Fondaction
Fonds de solidarite FTQ
HarbourVest Partners (Canada) Ltd
Investissement Quebec
Kensington Capital Partners Ltd.
Northleaf Capital Partners
Ontario Teachers’ Pension Plan (OTPP)
Teralys Capital
Limited Partners
source:
More than three-quarters of a billion dollars (CAD $831M over 117 deals) was invested in the first quarter of 2020, 7% lower than the same period in 2019 (CAD $897M). There was also a notable 45% quarter-over-quarter decline in activity which is the most pronounced drop in VC investment activity between the fourth and first quarters over the last five years.
“The venture capital investment performance in the first quarter demonstrates the health of the ecosystem in a pre-COVID-19 environment.” said Kim Furlong, Chief Executive Officer, CVCA. “We expect to continue to see a drop in the second quarter and potentially the third as investors have increased their reserve funding for existing portfolio companies. Also, the challenges in conducting due diligence given social distancing may impact the number of deals that get done in the next few months.”
There were 3 $50M+ mega-deals in the first quarter which accounted for a 30% share of total dollars invested. The largest of these was:
Kitchener-based Miovision Technologies Inc.’s $120M series C round from investors that included TELUS Ventures and McRock Capital
Information and Communication Technologies (ICT) companies received 54% of total dollars invested in Q1 2020 ($449M over 59 deals) with life sciences companies receiving a 21% share ($174M over 19 deals).
The pace of VC-backed exits in the 5-year between 2015-2019 (averaging 10 per quarter) slowed with only 3 undisclosed M&A exits in the first quarter.
VENTURE CAPITAL CANADIAN MARKET OVERVIEW // Q1 2020 | 4
source:
FOREWORD
Quarterly activity experiences a marked QoQ decline; further decline in VC investment in Q2 is anticipated due to COVID-19
VC-backed exit momentum also slowed in Q1 2020
VENTURE CAPITAL CANADIAN MARKET OVERVIEW // Q1 2020 | 5
source:
VENTURE CAPITAL HIGHLIGHTS // Q1 2020
Key Findings
$831M was invested over 117 deals in the first quarter this year which is 7% lower than the same quarter in 2019 ($897M) and 45% lower than Q4 2019 ($1.5B)
Although Q1 activity does not reflect the full impact of the COVID-19 lock down which started in mid-March, it is notable that the typical quarter-over-quarter drop in activity between Q4 to Q1 (45%) is the most pronounced it has been in the last 5 year period
The average deal size was $7.1M, a 14% decrease from Q1 last year and 3% lower than the average deal size during the 5-year period between 2015-2019 ($7.3M)
There were a total of 3 $50M+ mega-deals which accounted for a 31% share of total dollars invested. The largest of these was:
Kitchener-based Miovision Technologies Inc.’s $120M Series C Round
from investors that included Telus Ventures and McRock CapitalAlmost two-thirds of deal flow (75 out of 117) was less than $5M with 19
deals between $5M-$20M totaling $198MOntario-based companies received 61% of investment ($504M); BC-based
companies received a 20% ($164M) share followed by Quebec-based companies with 12% ($99M)
ICT companies grabbed 54% of total dollars invested in Q1 2020 ($449M over 59 deals) while life sciences companies received a 21% share ($174M over 19 deals)
Early stage companies received 50% of all funding ($419M over 72 deals)The pace of VC-backed exits slowed tremendously with only 3
undisclosed M&A exits in the first quarter
VENTURE CAPITAL CANADIAN MARKET OVERVIEW // Q1 2020 | 6
source:
4
46
21
11
34
35
$99M
$504MOntario
$164MBC
$53MAlberta
Québec
Nova Scotia$2M
New Brunswick$2M$5M
Manitoba
Newfoundlandand Labrador
$2M
2
VENTURE CAPITAL HEAT MAP // Q1 2020
$831Mtotal
117 dealstotal #
VENTURE CAPITAL CANADIAN MARKET OVERVIEW // Q1 2020 | 7
source:
QUARTER-OVER-QUARTER VC INVESTMENT ACTIVITY
$0
$250
$500
$750
$1,000
$1,250
$1,500
$1,750
$2,000
$2,250
$2,500
0
20
40
60
80
100
120
140
160
180
200
Q2Q1
$940
$703
Q3
$717
Q4
$839
$831
Q2Q1
$592
$864
Q3
$1,11
4
Q4
$1,0
55
Q1
$629
Q2 Q3
$1,0
70
$710
Q4
$1,2
68
Q1 Q1
$897
Q2
$1,3
50
Q3
$2,4
14
Q4
$1,5
06
125117
145
124
134
104
120 118111
128
143
108
129
116
151
130
163
TOTAL:528 DEALS
$3.2B
TOTAL:453 DEALS
$3.6B
TOTAL:508 DEALS
$3.7B
TOTAL:560 DEALS
$6.2B
TOTAL:117 DEALS
$831M
$ Millions Invested # Deals
2016 2017 2018 2019 2020
VENTURE CAPITAL CANADIAN MARKET OVERVIEW // Q1 2020 | 8
source:
VC ACTIVITY BY DEAL SIZE // Q1 2020
Total Deals $ Millions
< $100K
$100K - $500K
$500K - $1M
$1M - $5M
$5M - $20M
$20M - $50M
$50M +
7
18
12
38
19
9
3
$1
$8
$10
$88
$198
$272
$255
$5m
NEARLY TWO THIRDs OF ALL INVESTMENT ACTIVITY WAS
LESS THAN
VENTURE CAPITAL CANADIAN MARKET OVERVIEW // Q1 2020 | 9
source:
TOP 10 DISCLOSED CANADIAN VC DEALS // Q1 2020
company name province Disclosed VC Firm(s) sector stage $ mil
MIOVISION TECHNOLOGIES INC. ONTARIO TELUS VENTURES, MCROCK CAPITAL ICT LATER STAGE $120
TOP HAT ONTARIOGEORGIAN PARTNERS, INOVIA CAPITAL, UNION SQUARE VENTURES, EMERGENCE CAPITAL AND LEADERS FUND, BMO TECHNOLOGY AND INNOVATION BANKING GROUP
ICT LATER STAGE $72
ADA SUPPORT ONTARIO ACCEL, BESSEMER VENTURE PARTNERS, FIRSTMARK, VERSION ONE, LEADERS FUND, AND BURST CAPITAL ICT EARLY STAGE $64
ALAYACARE ONTARIO CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC, INOVIA CAPITAL LIFE SCIENCES EARLY STAGE $48
DEEP GENOMICS ONTARIO FUTURE VENTURES, AMPLITUDE VENTURES, KHOSLA VENTURES, MAGNETIC VENTURES AND TRUE VENTURES LIFE SCIENCES LATER STAGE $40
BENCHSCI ONTARIO F-PRIME CAPITAL, NORTHLEAF CAPITAL PARTNERS, GRADIENT VENTURES, INOVIA CAPITAL, GOLDEN VENTURES, AND REAL VENTURES ICT EARLY STAGE $30
NORTHONE ONTARIO BATTERY VENTURES, REDPOINT VENTURES, AND TOM WILLIAMS OTHERS EARLY STAGE $28
ASPECT BIOSYSTEMS BRITISH COLUMBIA RADICAL VENTURES, PANGAEA VENTURES, PALLASITE VENTURES, AND RHINO VENTURES LIFE SCIENCES EARLY STAGE $26
VALDERE ALBERTA WING VC, GREYLOCK PARTNERS AND SALLYPORT INVESTMENTS ICT EARLY STAGE $20
CANALYST FINANCIAL MODELING CORPORATION BRITISH COLUMBIA SCALEUP VENTURES, VANEDGE CAPITAL ICT EARLY STAGE $20
There were 3 undisclosed deals totalling $81M omitted from this table.
VENTURE CAPITAL CANADIAN MARKET OVERVIEW // Q1 2020 | 10
source:
TOP 10 CANADIAN CITIES ADMINISTRATIVE CENTRES // Q1 2020
29 DEALSTotal Deals $ Millions
1. Toronto
2. Montréal
3. Vancouver
4. Edmonton
5. Calgary
6. Victoria
7. Halifax
8. St. John’s
9. Kitchener, Waterloo
10. Hamilton
29
25
13
6
5
4
4
4
2
2
$348
$85
$118
$9
$44
$19
$2
$2
$122
$26
110
9
5
4
2 7
8
#1 toronto $348M
36
VENTURE CAPITAL CANADIAN MARKET OVERVIEW // Q1 2020 | 11
source:
VC SECTOR BREAKDOWN // 2016–Q1 2020
0
40
80120
160
200
240
280
320
400
360
440
480
$0
$300
$600
$900
$1,200
$1,500
$1,800
$2,100
$2,400
$2,700
$3,000
$3,300
$4,000
$2,
259
2017 2018 2018 201820182016 20172016 201720162016
$1,9
14
$20
8
$18
5
2017 2019 201920192019 Q12020
Q12020
Q12020
Q12020
322
269
104
$72
3
$67
2
$17
492 95
119
432859 49
27 2927
22 29
$27
8
$41
4
$94
300
316
$64
6
$2,
428
$4,
028
$1,0
51
$18
5
$12 $
158
$40
0
$9
$44
9
19 5 5
ICT CLEANTECHLIFE SCIENCES AGRIBUSINESS
$ Millions Invested # Deals
VENTURE CAPITAL CANADIAN MARKET OVERVIEW // Q1 2020 | 12
source:
VC STAGE BREAKDOWN // 2016–Q1 2020
$0
$250
$500$750
$1,000
$1,250
$1,500
$1,750
$2,000
$2,250
$2,500
$2,750
$3,000
20172016 20172016
$212
$1,5
94
$1,9
53
$1,3
53
20182018
262
232
192
85
7279
14
$1,4
22
59$236
2019 Q12020
$310
$251
2019 Q12020
20172016 2018 2019 Q12020
2019 Q12020
$1,5
64
$1,3
68
$343
$32
$1,5
45
98
263
178
154
177
25
194
24
2 0
30
60
90120
150
180
210
240
300
270
330
360
$2,7
42
$1,7
25
$17
$419
$ Millions Invested # Deals
SEED LATER STAGEEARLY STAGE GROWTH EQUITY
VENTURE CAPITAL CANADIAN MARKET OVERVIEW // Q1 2020 | 13
source:
$8M
$30mOntario
$36MBritish
Columbia$1M
AlbertaNA
Saskatchewan
NANova Scotia
Québec
2
2
2
1
4
4
VENTURE DEBT* HEAT MAP // Q1 2020
$75mtotal 15 deals
total #
* VC Debt deals are not included in the overall Canadian VC activity
VENTURE CAPITAL CANADIAN MARKET OVERVIEW // Q1 2020 | 14
source:
VC EXITS // 2016–Q1 2020
IPO/RTO**
$0
$300
$600
$900
$1,200
$1,500
$1,800
$2,100
$2,400
$2,700
$3,000
0
5
10
15
20
25
30
35
40
50
45
20172016 20172016
$584
$1,0
65
20182018
$1,0
33
$1,4
29
2019 Q12020
2019 Q12020
32
0 0 3
33
3936
03 $2,15
0
$1,6
00
$16
Exit Value ($ Millions) # Exits * Includes transactions with undisclosed values ** IPO valuation
M&A*
VENTURE CAPITAL CANADIAN MARKET OVERVIEW // Q1 2020 | 15
source:
MOST ACTIVE VC FIRMS // FUNDS // Q1 2020
MOST ACTIVE PRIVATE INDEPENDENT FIRMS # ROUNDSSIZE OF TOTAL
ROUNDS*(CDN$ MIL)
CYCLE CAPITAL MANAGEMENT/ECOFUEL 7 $50
INOVIA CAPITAL INC. 5 $93
REAL VENTURES 4 $29
BRIGHTSPARK CAPITAL 4 $15
GENECHEM 3 $3
KILLICK CAPITAL 3 $2
DASH40 VENTURES 2 $2
CHRYSALIX VENTURE CAPITAL 2 $65
MOST ACTIVE GOVERNMENT FUNDS # ROUNDSSIZE OF TOTAL
ROUNDS*(CDN$ MIL)
BDC CAPITAL 10 $67
MARS IAF 5 $3
INNOVACORP 5 $1
NEW BRUNSWICK INNOVATION FOUNDATION 4 $1
MOST ACTIVE PENSION, RETAIL, CORPORATE & OTHER PUBLIC FUNDS # ROUNDS
SIZE OF TOTAL ROUNDS*
(CDN$ MIL)
DESJARDINS CAPITAL 11 $29
TELUS VENTURES 4 $138
FONDS DE SOLIDARITÉ FTQ 1 $1
MOST ACTIVE FIRMS IN VC DEBT DEALS # ROUNDSSIZE OF TOTAL
ROUNDS*(CDN$ MIL)
CIBC INNOVATION BANKING 7 $51
VENBRIDGE 7 $2
ROADMAP CAPITAL 1 $21
LUGE CAPITAL 1 $2
HIGHLINE BETA 1 $2* Total deal values - includes all participating investors
# Rounds
Desjardins Capital
BDC Capital
Cycle Capital
MaRS IAF
inovia Capital
Innovacorp
TELUS Ventures
Real Ventures
Brightspark Capital
11107555444
Size of Total Rounds* (Cdn$ mil)
$29 $67 $50 $3 $93 $1 $138 $29 $15
VENTURE CAPITAL CANADIAN MARKET OVERVIEW // Q1 2020 | 16
source:
CVCA METHODOLOGY // VENTURE CAPITAL
VENTURE CAPITAL DATA:Verified completed equity, quasi-equity venture capital and venture debt deals only (non-equity or project-based government funding, pharmaceutical development deals, venture capital-backed acquisitions, and angel financing are not included)
VENTURE DEBT SHORT-TO-MEDIUM TERM, NON-DILUTIVE DEBT INSTRUMENT WITH NO EQUITY RIDER.
SEED STAGE COMPANY HAS A CONCEPT OR PRODUCT UNDER DEVELOPMENT, BUT IS PROBABLY NOT FULLY OPERATIONAL.
EARLY STAGE COMPANY HAS A PRODUCT OR SERVICE IN TESTING OR PILOT PRODUCTION. IN SOME CASES, THE PRODUCT MAY BE COMMERCIALLY AVAILABLE.
LATER STAGE PRODUCT OR SERVICE IN PRODUCTION AND COMMERCIALLY AVAILABLE. COMPANY IS GENERATING ON-GOING REVENUE, BUT NOT NECESSARILY, PROFITABLE.
GROWTH SIGNIFICANT MINORITY INVESTMENT TO DRIVE GROWTH AND SCALE WHICH CAN BE COMBINED WITH A SECONDARY TRANSACTION TO FACILITATE LIQUIDITY FOR EXISTING VC INVESTORS
ICT COMPUTER HARDWARE AND SOFTWARE AND SERVICES, INTERNET SOFTWARE OR SERVICES, ECOMMERCE, ELECTRONIC & SEMICONDUCTOR, MOBILE AND TELECOM TECHNOLOGIES AND SERVICES.
LIFE SCIENCES BIOTECH, MEDICAL DEVICES, PHARMACEUTICALS, EHEALTH, HEALTHCARE PRODUCTS AND SERVICES, AND OTHER MEDICAL RELATED PRODUCTS AND SERVICES.
CLEANTECH ENERGY AND FUEL TECHNOLOGIES, EFFICIENCY AND CONSERVATION, RENEWAL ENERGY, ENVIRONMENTAL TECHNOLOGIES AND OTHER ENERGY AND ENVIRONMENTAL PRODUCTS AND SERVICES.
AGRIBUSINESS TRADITIONAL AND ADVANCED AGRICULTURAL TECHNOLOGIES AND SERVICES
vc development stages
vc sectors
ABOUT AND CONTACT To obtain estimates for additional custom CVCA Intelligence data reports please contact [email protected]
About CVCAOUR VISIONA thriving Canadian economy driven by private capital
OUR MISSION CVCA’s mission is to help our members fuel the economy of the future by growing the busi-nesses of today. We do this by supporting and connecting a vibrant private capital industry with advocacy, research, and education.
CVCA is also the nation’s ultimate resource for data on Canadian private capital investments.
Please visit cvca.ca
@CVCACanada CVCA
CVCA - Canadian Venture Capital and Private Equity Association
372 Bay St., Suite 1201 Toronto, ON M5H 2W9
Authorsdarrell pinto vp, research & industry [email protected]
david kornacki associate, research & [email protected]
jon jackson head of [email protected]
IZADELLA STA. ROMANA MARKETING & BRAND [email protected]