Canadian venture capital (VC) totalled $1.38 billion in Q1, 2024, almost unchanged from that of Q4 2023 and Q1 2023.
Q1 2024 investment activities highlights
74% of $1.38 billion came from US and International investors
US mutual/hedge fund investors led all investor type, replacing US VC, the usual Canadian VC funder.
Biotech investments, doubling IT investments, secured $622 million
News Release
Q1 2024, 74% of $1.38B VC investments from USA and International investors
All dollar ($) figures in Canadian dollars unless otherwise noted.
TORONTO, April 23, 2024 /Private Capital Newswire/ – Canadian venture capital (VC) totalled $1.38 billion* in Q1, 2024, almost unchanged from that of Q4 2023 and Q1 2023.
Q1 2024 investment activities can be summarized in three words, PIPE (Private Investment in Public Equity), Biotech, US Mutual/Hedge Fund.
PIPE financings dominate
Five PIPE financings resulted in investments of $480 million, accounting for approximately 35% of the total amount.
Early-stage financings continue to lead, raising $603 million or 44% of the total amount.
Biotech overtakes IT
Two large PIPE financings propelled biotech investment with $622 million, well ahead of $310 million by IT companies, $197 million by financial companies and $162 million by cleantech companies.
US Mutual/Hedge fund replaces US VC
US mutual funds and hedge funds invested $437.84 million primarily in the two biotech PIPE financings.
US private VC, Canadian government funds, Canadian private VC and US corporate VC round up the top investor types.
| Top 10 Investor Types | $ Invested (Mil) |
| US Mutual/Hedge Fund | 438 |
| US Private VC | 228 |
| CDN Government | 112 |
| CDN Private VC | 97 |
| US Corporate VC | 93 |
| International Private VC | 85 |
| US Private Investors | 58 |
| CDN Family Offices | 57 |
| CDN Private Investors | 39 |
| CDN Corporate VC | 35 |
| $1,242 (90%) |
Q1 2024 Other Highlights
Provinces
Companies from Ontario, Quebec, BC, Alberta and New Brunswick raised $733 million, $346 million, $212 million, $81 million and $11 million respectively.
Company size
Companies with 0-49 employees raised $1,193 million or 86% of the total amount. Companies with 50-99, 100-499 and 500+ employees raised $33 million, $157 million and nil respectively.
Q1 2024 VC fund fundraising
VC fundraising recovered in Q1 2024, with 17 funds raising $745 million. 11 private VC funds led with $693 million in capital raise.
Q1, 2024 VC results contain two disturbing items. First, 74% of all VC investments were sourced from abroad, the vast majority from the U.S. Put differently, 26% of VC investments in Canada in the quarter came from Canadian sources (and even less from Canadian venture capital funds). This is a historically low contribution of VC from Canadian sources and may be a sign of structural weakness in the industry – which was not addressed by the April 16, federal Budget with its miniscule allocation of $200 million to the industry. Second, and as part of the same malaise while $1.38 billion was invested, just under half, or $745 million was raised by 17 Canadian VC funds. In other words, these funds were only able to raise about 50% of the demand for VC capital in Q1. On the better news front, biotech investing (led by US and International funds) surged to an all-time record high in Q1 relative to other areas like IT, fintech, etc., commented Richard Rémillard, President of Rémillard Consulting Group (RCG).
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.
• Acquisition for expansions (M&As)
• 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 94,600 financing transactions in its Canadian Financings database, CPE Analytics is Canada’s leading all financing intelligence provider. We provide comprehensive, verified, unbiased and unmatched insights and intelligence on private and public financings, initial public offerings (IPOs), M&As, professional investment firm fundraising activities.
We cover all aspects of VC information, not limited to but including Canada’s only information on VC firm fundraising, VC funding sources (where all the VC came from).
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/
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Source: CPE Media & Data Company