Canadian VC-backed companies continue to be on a tear raising $700M+ in Q2-Q3’14, and over $1.5B over the past four quarters. Below we dig into some of the data and trends discernible within Canada’s venture ecosystem.
Mid-Stage investments surge
Over the past two quarters, early-stage investments to Canadian VC-backed companies continued to account for 60%+ of all deals, however Q3’14 saw a surge in mid-stage financings. Mid-stage deals included an $85M Series B to ed tech company Desire2Learn as well as a Series C financing to Hootsuite, which cumulatively raised $60M and valued them at $1B putting them into the unicorn club (startups worth $1 billion or more). The Hootsuite investment featured Insight Venture Partners and Accel Partners, among others.
Tech bounces back in Q3’14
After other sectors including energy & utilities, industrial, and consumer products captured over 1/4 of investments into Canadian VC-backed companies in Q2’14, tech bounced back to take 78% deal share in Q3 behind 20+ deals in Internet companies totaling over $200M. Mobile and computer hardware rounded out the top 3 in terms of sectors (both which fall into our larger tech sector classification). Notable deals included Accel Partners-backed Lightspeed Retail’s $35M Series B fundraise which valued the mobile PoS startup at $200M.
BDC Venture Capital is Most Active
Montreal-based BDC Venture Capital has been by far the most active VC (VC, micro VC, Corporate Venture unit) in Canadian companies over the past four quarters with investments in over 30 unique companies in that time period. Real Ventures followed with 15+ unique companies invested in, while iNovia Capital and Yaletown Venture Partners tied for third with over 10 unique companies invested in over the past four quarters.
| Rank | Investor |
|---|---|
| 1 | BDC Venture Capital |
| 2 | Real Ventures |
| 3 | iNovia Capital |
| 3 | Yaletown Venture Partners |
| 5 | OMERS Ventures |
| 5 | GrowthWorks |
| 5 | Georgian Partners |
| 5 | InNOVAcorp |
| 9 | Golden Venture Partners |
| 9 | Relay Ventures |
| 9 | 500 Startups |
| *Most active based on unique companies invested in | |
Canada Still Searching For VC-Backed IPOs
Over the past four quarters, Canadian VC-backed companies have had 29 exits, only two of which were IPOs. Q2’14 had 9 exits, the second highest total over the past two years. Q4’14 is on track to be a big quarter with 4 acquisitions already through mid-October. If the current pace keeps, Canadian VC-backed exits may challenge Q1’13 for the highest number of VC-backed exits in Canada.
Canada Exits by Sector
Over the past four quarters, VC-backed Canadian internet companies have had over 1/3 of all exits including Ottawa-based Kinaxis’ IPO in Q2’14. More broadly, tech (internet, software, computer hardware, mobile, electronics) cumulatively has accounted for 66% of all venture-backed exits over the past four quarters.
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