Canadian venture capital reaches record $7.26 billion in 2019

Canadian venture capital (VC) disbursements reached a record $7.26 billion across 642 financings in 2019, according to a report from CPE Analytics and Remillard Consulting Group, a financial services-focused advisory firm.

The number of financings grew by 28% from 2018 to reach 642 in 2019, while the $7.62 billion registered in 2019 was an increase of 48% over the previous year.

Large deals, with a value of over $50 million, accounted for $3.42 billion (or 47%) of disbursements. There were 26 large deals in Canada in 2019.

Ontario and Quebec accounted for the largest portion of VC financing, raking in 39% and 29% respectively.

Information and communications technology firms were the most popular category, raising $4.02 billion, followed by biotech companies, which raised $1.59 billion.

The largest portion of funding came from US investors, at $3.32 billion (46%), followed closely by Canadian investors at $3.26 billion (45%). European investors contributed $320 million (4%), while Asian investors contributed $312 million (4%).

The top five investor types were: private VC funds - $2,180 million (43%); corporations - $936 million (18%); family offices - $491 million (10%); angel investors - $293 million (6%) and government - $289 million (6%).

BC companies attracted the largest amount of US investment, with $1.09 billion or 61% of disbursements. Total foreign investment in BC companies was $1.39 billion, or 78% of disbursements.

Quebec and the Prairies attracted the least foreign investment, accounting for just 38% and 43%, respectively, of total VC disbursements.

The top initial public offerings were Lightspeed POS and Milestone Pharmaceuticals, which raised $276 million and US$95 million, respectively.

"These 2017-19 results clearly indicate that venture capital was full-throttle on the upswing of its regular business cycle with fund raising and disbursements both growing strongly across most categories, notably US and foreign investment," said Richard Rémillard, president of Remillard Consulting Group (RCG). "The strong 2017 - 2019 numbers should position VC-funded companies and VC funds themselves in good stead to withstand the ravages of Covid-19, particularly those firms that entered the pandemic crisis with substantial dry-powder remaining and who most likely raised considerable sums in the latter half of 2019."