As funding to the Canadian startup ecosystem grows, VC-backed exits are also happening. No unicorns yet, but is it just a matter of time?
Last month we looked at the funding trends for Canadian startups. With the amount of funding that venture investors are putting into the Canadian startup ecosystem increasing, how does the exit picture look?
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Over the past two years, Canadian VC-backed startups have seen 55 exits, with 52 M&A deals and 3 IPOs. While the past four quarters were down 39% YoY, they did feature two IPOs by Aquinox Pharmaceuticals and semiconductor company ViXS Systems.
Q1’13 was the best quarter registering 1/5 of all VC-backed exits in the past two years. Select exits include Influitive’s acquisition of email productivity tool Engagio, and Radware’s February 2013 acquisition of Vancouver-based Strangeloop Networks.
Tech Accounts for nearly ¾ of All Exits
VC-backed internet companies accounted for the most exits of any sector over the past two years at 29%. Software (non-internet/mobile) and Computer Hardware & Services rounded out the top 3. Technology sectors as a whole made up a combined 74% of all exits. Select tech exits include the $100M majority stake taken in QuickPlay Media by private equity firm Madison Dearborn Partners and T2 Systems’ February 2014 acquisition of Digital Payment Technologies.
GrowthWorks Leads All Investors in Exits
With recent exits from the previously-mentioned Digital Payment Technologies among others, Vancouver-based VC GrowthWorks had the most Canadian venture-backed exits in their portfolio over the past two years. BDC Venture Capital, Rho Canada, Ventures West, and Extreme Venture Partners rounded out the top 5.
Toronto on Top Again
When looking at funding for startups in Canada, Toronto came in first in terms of number of investments. Continuing the trend, Toronto led all Canadian cities with 29% of exits. Recent exits include PCH International’s acquisition of eCommerce platform ShopLocket in January 2014, Fuse Powered’s acquisition of social recommendation platform AppHero in December 2013, and Pivotal’s acquisition of Xtreme Labs in October 2013. Vancouver and Montreal rounded out the top 3 with over 5 exits each.
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