The National Angel Capital Organization (NACO) has released its annual report on angel investing activity in Canada for 2017.
The report, which is based on a survey of 43 angel groups across Canada, was developed in partnership with the Government of Canada, BDC Capital, RBC, BDO, Ryerson Incubate, and Innovate Network Canada. The report highlights key trends and statistics of Canada’s angel market, and finds that angel groups are continuing to support entrepreneurs at all stages including those seeking first-time investments and follow-on investments.
According to the report, Canadian angel groups made 505 investments in 2017, investing a total of $162.6 million in companies. The report also indicated that the average deal size reached $1.91 million, which is higher than the $1.7 million deal figure from 2016.
“Increasingly, the angel network is filling the seed to growth stage in the investment scale.”
NACO’s report notes that investment activity is dominated by the information-communication technology (ICT) sector, which makes up 44 percent of the total deals and 28 percent of the dollars invested, followed by the life sciences sector, which accounts for 16 percent of the deals and 22 percent of the amount invested.
Yuri Navarro, CEO of NACO, said the 2017 report is “very encouraging” as it shows a trend towards greater collaboration between angels and other partners including VCs, IPOs, and commercial banks.
“Increasingly, the angel network is filling the seed to growth stage in the investment scale stepping in to provide critically needed bridge capital to startups as they mature into scalable ventures,” said Navarro. “This growing angel funding bridge will not only generate more positive investment outcomes, it also helps to build stronger late-stage innovation companies that strategic investors can support.”
“The growth NACO is reporting in terms of both deal size and the breadth of support provided by angel investors is an excellent sign that Canada’s high-growth firms are being well-served.”
Geographically, the report shows that angel investment activity is distributed unevenly across Canada, with central Canada attracting 72 percent of investments in 2017, while western Canada attracted 26 percent of investments and eastern Canada attracted two percent of investments.
While western Canada had the most angel investment activity in 2016, this year’s report found that central Canada had the most investment on a per capita basis given that the region has made larger investments than angel groups in other regions.
Overall, the NACO report suggests that angel activity in Canada continues to increase, as there was a 20 percent increase in the number of investments in 2017, coupled with a 3.4 percent increase in the amount invested. The report highlights that angel groups play a significant role in the Canadian entrepreneurial ecosystem, as half the groups reported being in operation for more than five years.
“Growth capital, especially angel investment, is vital to Canada’s innovation ecosystem and our competitiveness on the global stage,” said Navdeep Bains, Minister of Innovation, Science, and Economic Development. “The growth NACO is reporting in terms of both deal size and the breadth of support provided by angel investors is an excellent sign that Canada’s high-growth firms are being well-served by both the investment community, and through initiatives such as the Innovation Superclusters Initiative, which brings together companies of all sizes along with academia to advance bold and ambitious innovation strategies.”
View the full report here.
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