In Quebec, Venture Capital Flowing to Startups Doubled Last Quarter

Startups in Quebec had a positive second quarter in 2014, as the amount of venture capital invested towards early-stage companies doubled. That money represented 26 percent of the market.

The 2014 second-quarter report on activity in the VC industry was compiled by Thomson Reuters and released today by Réseau Capital. The Québec buyout and private equity (PE) market also continued to show strong growth, with investments totalling $2.9 billion in the first quarter, nearly double the amount reported for the same period in 2013.

Technically the numbers last year, over all by the end of Q2, were the same (47 deals at the end of Q2 2013 vs 44 this year). And the overall amount of money invested isn’t that impressive either: the total invested declined by 55% compared with 2013, falling to $94 million.

However, startup and early-stage companies benefitted from this, as activity picked up compared with the first quarter of 2014, when investments totalled $68 million

“Since the start of the year, we have seen the VC market in Québec shaped by smaller financing rounds, with the average amount invested standing at $2.1 million, compared with $4.4 million during the same period last year,” said Réseau Capital CEO Jack Chadirdjian. “The significant growth in the financing of companies at very early stages of development is good news, since their increased presence will energize the industry by creating a large pool of innovative companies in Québec.”

Non-technology sectors dominated VC activity in the second quarter, with $56 million in investments, or 60 percent of the total. The information technologies and clean technologies groups each accounted for 14 percent of market activity, while life sciences declined to 12 percent of all investments. Major transactions in Québec included the $10 million Series A round raised by Montréal’s OMsignal.

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