Canada set a new record for angel investment last year, according to data from a forthcoming National Angel Capital Organization’s (NACO) annual report.
The number of angel investments made in Canada during 2021 increased 53 percent year-over-year, as angel organizations facilitated 635 investments, up from 416 in 2020. In total, more than $262 million was invested across the Canadian startup ecosystem.
“While we have more work to do, I’m proud of what our network has achieved this past year.”
-Claudio Rojas, NACO
Angel investment in Canada dropped compared to 2019 during the first year of the pandemic amid market uncertainty. These 2021 figures represent a rebound compared to the year prior: more than two and a half times the $103 million angels invested across Canada in 2020.
“In 2021, we saw a wide-ranging shift from traditional modes of angel investing, with SPVs and early-stage funds contributing to a vibrant ecosystem,” said NACO CEO Claudio Rojas. “We also saw a conscious approach to breaking down systemic barriers for women and underrepresented entrepreneurs.”
According to NACO, the gender balance of the angel investing landscape also shifted during 2021, as women now comprise 27 percent of the members of Canadian angel organizations. This constitutes a 13 percent increase compared to 2020, and a 60 percent rise relative to 2019 and 2018.
“While we have more work to do, I’m proud of what our network has achieved this past year,” said Rojas.
Founded in 2002, NACO is Canada’s professional association for angel investors, comprising 4,200 angel investors, 50 incubators and accelerators, and 45 angel groups across the country.
During the last 12 years—the period that NACO has been tracking angel investing across the Canadian innovation ecosystem—$1.38 billion has been invested across the country. In 2021, the average amount invested per company was more than $346,000.
On a quarterly basis, NACO saw a sharp increase in investment activity from Q1 to Q2, followed by a slight drop in Q3 and a slight rise in deal activity during Q4.
Ontario and Quebec accounted for 67 percent of 2021 investments, while Atlantic Canada saw 5 percent, Western Canada drove 27 percent, and the Yukon led 1 percent.
While angel investing has rebounded since the early days of COVID-19, amid the market downturn—which has been fuelled by rising inflation, interest rates, and geopolitical tension—and the prospect of a recession, the sector could face further challenges this year. NACO Chair Mary Long-Irwin said it is the organization’s priority “to sustain this momentum in the face of mounting economic pressures.”
NACO plans to release its full 2021 report next month.