The Canadian Venture Capital and Private Equity Association (CVCA) has released its report on Canadian venture capital and private equity activity for the first half of 2018.
CVCA said it verified completed equity or quasi-equity VC deals only and excluded non-equity or project-based government funding, pharmaceutical development deals, VC-backed acquisitions, angel financing, and senior debt from the data.
The report found that nearly $1 billion was invested over 166 deals in Q2, bringing the year-to-date total VC investment to$1.7 billion. CVCA said this amount is seven percent higher than the first half of 2017.
The first two quarters of 2018 saw 16 exits. The largest exits included Eli Lilly’s acquisition of AurKa Pharma and Coveo Solutions’ $100 million acquisition by a US-based private equity firm.
“We’re consistently observing an increase in size and volume of deals at all stages; plus, a welcome resurgence in exits.”
The top 10 deals accounted for $624 million (38 percent) of total dollars disbursed in H1 2018, which is the largest share since 2013, where the top 10 deals accounted for 34 percent of total dollars invested.
The average deal size in Q2 2018 was $6 million, up 28 percent from the previous quarter and 13 percent higher than the average deal size between 2013 and 2017, which was $5.3 million.
The CVCA report found that there were seven deals worth over $50 million in the first half of 2018, totalling almost half a billion dollars. Among those deals were Toronto-based Ritual’s $90 million Series C round, Toronto-based ecobee’s $80 million Series C round, and Toronto-based TouchBistro’s $72 million Series D funding.
“Innovation in Canada is enjoying the best venture capital investment climate in well over a decade,” said Mike Woollatt, former CEO of the CVCA who recently departed the organization to join OMERS. “We’re consistently observing an increase in size and volume of deals at all stages; plus, a welcome resurgence in exits. We’re bracing for 2018 to be another record year.”
When it comes to which sectors saw the most VC activity, the CVCA report indicated that ICT companies received the majority (64 percent—or $1.1 billion over 189 deals) of VC dollars invested in H1 2018. Life sciences companies received $204 million of dollars invested over 48 deals, while cleantech companies received $192 million over 28 deals.
Ontario-based companies received $907 million in VC dollars invested in H1 2018, up from the $609 million received in H2 2017. Quebec-based companies received $319 million of all dollars invested and British Columbia-based companies received $276 million.
On a city level, Toronto-based companies received almost 50 percent of total dollars invested ($793 million invested over 89 deals), followed by Vancouver at 16 percent ($264 million over 38 deals) and Montreal at 15 percent ($264 million over 64 deals).
The report also noted an increase toward later stage companies, which received 54 percent ($901 million) of total dollars invested, compared to 41 percent last year. Early-stage companies received 37 percent ($621 million), down from their 52 percent share in H1 2017.
The full report is available on the CVCA website.
Photo via Unsplash