Canada’s venture capital scene has seen an explosive $2.5 billion in activity in the first nine months 2016 according to a new report from Thomson Reuters, which they say is the best result the country’s startups have seen in 15 years. These numbers already top $2.3 billion in all of 2015 according to a report by CVCA (Canadian Venture Capital and Private Equity Association).
A total of 11 companies raised at least $50 million each, the most prominent of which was Thalmic Labs’ $120 million Series B funding round led by Intel Capital. That brought the average investment of to $5.6 million. Among the other literal big deals were Real Matters ($100 million), Vancouver’s biotherapy startup ($87.8 million), and Winnipeg’s agritech startup Farmers Edge ($58 million). Montreal’s contributions included Dalcor Pharmaceuticals ($126.7 million), Triotecth Amusement ($80 million), and Blockstream ($75.8 million).
The third quarter saw $774 million in deals, far below the $10.6 billion seen in the US. That $5.6 million average was high for Canada, but it lags behind the US ($17.7 million), UK ($16.9 million), and Israel ($15.3 million). That average lets them push just past France for the ninth-highest average round in the world.
Relay Ventures, which recently announced a new $150 million (CA$200 million) fund, was among the top eight Canadian funds contributing to the ecosystem’s numbers (10 deals). Real Ventures led the way with 50 deals worth $22.2 million, Angels Quebec with 28 deals worth $10.1 million, and iNovia Capital at 17 deals worth $52.6 million.
Unlike in the US, government funds are very active. The Business Development Bank of Canada took part in 82 deals worth $112.9 million). Several province-focused government and pension funds covering Ontario, Quebec and New Brunswick were shown to have been significantly active during this period.
It’s worth noting that Canadian venture funds increased their participation in US deals, climbing to $362 million in 67 deals with the biggest round being a $103.1 million Series D round in car insurance startup MetroMile and $35 million Series E round in San Diego’s Tealium. Inversely, the some big US venture funds each participated in three deals north of the border. Kleiner Perkins Caufield & Byers invested $21.8 million and Battery Ventures $16.9 million were the most prolific. A third of foreign investments (which only made up a 5th of VC in Canada) came from the US.
The CVCA’s 2015 venture report put 2015’s total at CA$2.3 billion, but Reuters provides what seems to be an updated figure of $2.748 billion for last year.
Montreal catches up to Toronto
Breaking it down regionally, last year, Ontario (CA$939 million) easily topped Quebec (CA$693 million) for the entire year, as well as British Columbia (CA$450 million) according to the CVCA’s 2015 report. Ontario is already at CA$1.12 billion in the first three quarters of 2016, while Quebec has hit the CA$840 million mark.
In a combined rank of US states and Canadian provinces, Ontario places 6th and Quebec 8th in terms of amount of money invested in H1 2016 as well as the first three quarters of the year. They were behind California (obviously), New York, Massachusetts (led by Boston), Florida and then Texas (thanks to Austin). Illinois (almost entirely Chicago) was 7th.
A slight surprise for some might be the cities ranking. Montreal rose five places to be the 11th strongest venture capital city in North America and Toronto swapped spots with Austin to reach the number 13 spot. Vancouver and Kitchener-Waterloo for their part were 20th and 21st place respectively.
In fact, our of the top eight rounds in the country only one was in Toronto (Flipp Corp) while three were in Montreal (Dalcor, Triotech, and Blockstream). The report also only noted three IPOs, none of which were VC-backed and none of them from Toronto. Fibre Noire Internet out of Montreal was one of them.
Startup Compass ranked two cities and Vancouver pretty close together in their 2015 global startup ecosystem rankings. Montreal was ranked at 20th place with an estimated to have a total value of US$3.4-4.1 billion against Toronto’s 17th place at a value of US$6.4-7.8 billion. Vancouver was ranked 18th, while Waterloo-Kitchener startups won an honorable mention for its prolific innovation.