CPE Analytics (5.31.2022) – CPE Analytics is pleased to release Canada’s un-inflated Canadian venture capital investment results for Q1 2022.
Q1 2022 Hight lights
US and foreign investors invested $2.49 billion, a historical high of 74% of total disbursements. US investors alone invested 59% for $1.98 billion.
Cleantech companies received $478 million replacing Biotech as second active sector. Biotech companies raised $268 million, dropping to fourth place behind financial.
Eight Canadian venture capital funds, including 6 private, 1 social impact, and 1 corporate funds, raised $555 million in Q1 2022.
photo credit: Mario Léveillé, via pixabay
News Release
US and foreign investors drive Q1 2022 Canadian VC investments to $3.37B
– 145 venture capital financings for disbursements of $3.37 billion in Q1 2022.
– Investors from US and foreign countries/regions invested $2.49 billion, a historical high of 74% of total disbursements. US investors alone invested 59% for $1.98 billion.
– Cleantech companies received $478 million, second behind $2.12 billion by ICT companies, ahead of $451 million by financial companies.
– Biotech companies raised $268 million, dropping to fourth place from its usual second place.
– US VCs and foreign corporate VCs led all investor types, investing $1,282 million and $456 million respectively. Canadian VCs ranked 3rd investing $303 million.
– $555 million raised by 8 Canadian venture funds.
All dollar ($) figures in Canadian dollar unless otherwise noted.
TORONTO, May 31, 2022 – Canadian Startup companies raised $3.371 billion in venture capital(1) through 145 financings in Q1 2022, according to the Canadian Venture Capital Report released today by CPE Analytics, a division of CPE Media & Data Company.
Q1 2022 VC funding sources (who is funding Canadian Startup companies?)
US and foreign investors invested $1,983 million and $512 million in Canadian companies or 59% and 15% of the total respectively. Canadian investors’ share dropped further to 26% of the total, down from previous low of 28% in 2021.
In light of the war in Ukraine, it is worth noting that $14 million was invested by Russian entities into Canadian companies in Q1 2022. Russia’s Severstal, controlled by oligarch Alexey Mordashov (who has been sanctioned by the European Union), invested into Ekona Power as part of $79 million financing which closed in November 2021 and January 2022. This funding round was led by Baker Hughes and included participation from BDC among others.
US VCs and foreign corporate VCs led all investor types, investing $1,282 million and $456 million in Canadian companies respectively. Canadian VCs were the third largest with $303 million.
US and foreign Investment regional breakdowns
US and foreign investments accounted for over 50% of the total disbursement in all regions except of the Atlantic region.
Ontario attracted the largest share (83%) of US and foreign investments. Atlantic region attracted the least share (17%).
Q1 2022 VC disbursements
The $3.37 billion disbursements recorded in Q1 2022 are the second largest quarterly disbursements, behind the record of $4.84 billion in Q2 2021.
Q1 2022 disbursements ($3,371 million) were up 13% from Q1 2021 ($2,985 million) through the number of financings (145) was down 32% from Q1 2021 (212).
Provinces
Ontario led all provinces securing $1,340 million from 47 financings. Quebec and BC raised $989 million $547 million respectively.
Alberta and Saskatchewan rounded up the top provinces with over $100 million investment with $336 million and $109 million respectively.
Municipal Cities
Companies from 25 cities raised venture capital funding. The top 8 cities with $50 million or more investments were Toronto, Montreal, Vancouver, Calgary, Waterloo, Saskatoon, Mississauga, Kitchener, together and collectively accounting for $3,232 million or 96% of the total Q1 2022 disbursements.
City of Toronto was the only $1 billion plus recipient city.
Sectors
ICT companies continued to attract lion’s share of VC investments, raising $2,119 million or 63% of the total amount.
Cleantech(2) companies raised $477 million becoming the second active sector ahead of financial and biotech.
Biotech raised $268 million, being relegated from usual 2nd place to 4th place. It should be noted that Ventus(3)’s US $140 million financing was excluded as the money went to Waltham, Massachusetts based parent company, not to the Montreal based subsidiary.
Stages
Early stage and growth/late-stage financings led in total disbursements, raising $2,227 million and $821 million respectively.
Seed/pre-seed financings raised $79 million from 25 financings representing 17% of total number of financings.
Company size
Companies with 0-49, 50-99, 100-400 and 500+ employees raised $2,046 million, $220 million, $703 million, and $401 million respectively.
Q1 2022 VC fund fundraising (money raised by Canadian VC funds to invest in both Canadian and US/foreign companies)
Eight Canadian venture capital funds, including 6 private, 1 social impact, and 1 corporate funds, raised $555 million in Q1 2022.
Q1 2022 VC law firms
Eighteen known law firms acted as legal counsels in various capacities for the companies or the investors.
The top six active VC law firms were Osler, Hoskin & Harcourt LLP, Fasken Martineau DuMoulin LLP, Borden Ladner Gervais LLP, LaBarge Weinstein LLP, Bennet Jones LLP, and Cox Palmer.
“A continuing trend in Q1, 2022 that has been noticeable since 2019 is the predominance of VC funding provided by US investors. Some observers may view this as evidence of Canada’s success in attracting foreign investment while others may conclude that this points to an ongoing risk factor to the Canadian innovation economy should that source of funding suddenly evaporate as has happened in previous downturns,” commented Richard Rémillard, President of Rémillard Consulting Group (RCG). “The data also reveal that 76% of disbursements went to Toronto, Montreal and Vancouver alone with the vast majority of the rest of the country receiving little to no infusions of VC, a situation that is rife with implications for regional economic development and for the quality of the transition to the Innovation economy.”
Summary report
Summary report can be downloaded from financings.ca website: https://www.financings.ca/reports/
Methodology
Included
• Equity and quasi-equity investments in companies directly.
Excluded
• Secondary transactions (investor/shareholder exit events) in which companies received no money
• PE transactions
• Financing by foreign headquartered/domiciled companies with Canadian subsidiaries.
Rémillard Consulting Group (RCG)
Rémillard Consulting Group (RCG) is a unique, Ottawa-based, bilingual consulting firm specializing in providing private sector, government & trade association clients with creative, research-grounded solutions to business issues and public policies involving the Canadian financial services industry. For more information: rremillard@bellnet.ca
CPE Analytics
With over 63,300 financing transactions and 85,900 data points in its all financings.ca database, CPE Analytics is Canada’s leading all financing intelligence provider. We provide comprehensive, verified and unbiased information and unmatched insights and intelligence on private and public financings, initial public offerings (IPOs), M&As, professional investment firm fundraising activities.
CPE Analytics is the data analytics division of CPE Media & Data Company. More Info: https://cpeanalytics.ca, https://financings.ca
CPE Media & Data Company
Founded by Canada’s the most experienced private capital and financing research experts, CPE Media & Data Company is Canada’s leading all financing news and intelligence provider. More information: https://cpecompany.ca/
Contact
Ted Liu, President & CEO
CPE Media & Data Company
647-782-8818, tzliu @ cpecompany.ca
Source: CPE Media Inc.
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1 CPE Canadian VC investment data includes only primary share issuance/funding by companies and excludes secondary transactions involving investors buying shares from founders and/or existing investors, with no money flowing into companies. The US $300 million secondary transaction as part of 1Password’s US $620M Series C transaction was excluded, so were some known PE transactions (Hydrostor), VC deals by foreign companies with Canadian subsidiaries (Shoplazza, Ventus).
2 CPE Analytics has re-classified and included advanced agri-tech in cleantech.
3 https://privatecapitaljournal.com/ventus-therapeutics-secures-us-140m-series-c-led-by-softbank-vision-fund-2-and-ra-capital/