VENTURE CAPITAL CANADIAN MARKET OVERVIEW // H1 2020 · 2020. 8. 25. · VENTURE CAPITAL CANADIAN...

VENTURE CAPITAL CANADIAN MARKET OVERVIEW

// H1 2020

VENTURE CAPITAL CANADIAN MARKET OVERVIEW // H1 2020 | 2

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CONTENTS

PARTICIPATING DATA CONTRIBUTORS .......................................................................3 FOREWORD ......................................................................................................................4 VENTURE CAPITAL HIGHLIGHTS ..................................................................................5 DATA VISUALIZATIONS ...................................................................................................6 VENTURE CAPITAL HEAT MAP ................................................................................................................. 6 QUARTER-OVER-QUARTER VC INVESTMENT ACTIVITY ................................................................. 7 VC ACTIVITY BY DEAL SIZE ...................................................................................................................... 8 TOP 10 DISCLOSED CANADIAN VC DEALS...........................................................................................9 TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES ............................................................. 10 VC SECTOR BREAKDOWN ....................................................................................................................... 11 VC STAGE BREAKDOWN .......................................................................................................................... 12 VENTURE DEBT HEAT MAP ..................................................................................................................... 13 VC EXITS ....................................................................................................................................................... 14 TOP DISCLOSED VC EXITS ..................................................................................................................... 15MOST ACTIVE VC FIRMS // FUNDS ....................................................................................................... 16

VENTURE CAPITAL METHODOLOGY ......................................................................... 17 AUTHORS, ABOUT CVCA AND CONTACT INFO ..................................................... 18

VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2020 | 3

PARTICIPATING DATA CONTRIBUTORS

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If you would like to have your firm included in future reports, please contact [email protected]

CVCA thanks the following firms who participated in its H1 2020 survey.

7 Gate Ventures

Accelerate Fund

AmorChem Fund

Amplitude Ventures

Anges Quebec

Anges Quebec Capital

Arctern Ventures

AVAC Ltd.

Azure Capital Partners

BCF Ventures

Brightspark Capital

CIC Capital Ventures

Clanton Capital

Conexus Venture Capital

CTI Life Sciences

Cycle Capital Management/EcoFuel

Dash40 Ventures

Emerald Technology Ventures

Espresso Capital Ltd.

Evok Innovations

Ferst Capital

Fight Against Cancer Innova-tion Trust

First Ascent Ventures

Fonds Innovexport

Framework Ventures

Freycinet Ventures

Good News Ventures

GreenSoil Investments

Highline Beta

iGan Partners

Information Venture Partners

inovia Capital

Island Capital Partners

Klass Capital

Luge Capital

Lumira Ventures

Mantella Ventures Partners

MaRS Catalyst Fund

MaRS IAF

McRock Capital

Metiquity Ventures

Mistral VP

NAventures (National Bank of Canada)

New Brunswick Innovation Foundation

OMERS Ventures

Panache Ventures

Pangaea Ventures

Portag3 Ventures

Quark Venture

Real Ventures

Relay Ventures

Renewal Funds

Roadmap Capital

Round 13

ScaleUP Ventures

Sectoral Asset Management Inc.

Tactico Inc.

Tandem Expansion

TandemLaunch

TELUS Ventures

Top Renergy

TVM Life Sciences

V3-Ventures

Vanedge Capital Partners

Version One Ventures

White Star Capital

Yaletown Partners

Venture Capital FirmsAIP Private Capital

ARC Financial

Ardenton Capital Corporation

BDC Growth Equity

BDC Growth & Transition Capital

BMO Capital Partners

Bond Capital

CAI Capital Partners

Canadian Business Growth Fund

Capital Financière Agricole

Clairvest Group Inc.

Clearspring Capital Partners

Crédit Mutuel Equity

Founders Group of Food Compa-nies Inc.

Fulcrum Capital Partners

Highland West Capital

InstarAGF Asset Management

Ironbridge Equity Partners

Kayne Capital

Killick Capital Inc.

m2s Capital

Mink Capital

Mosaic Capital Corporation

Novacap Management Inc.

OMERS Private Equity Inc.

ONEX Corporation

PenderFund Capital Management

Persistence Capital Partners

PFM Capital Inc

PRIVEQ Capital Funds

Regimen Equity Partners

Seafort Capital

Searchlight Capital Partners

TIMIA Capital Corp

Tricor Pacific Capital Ltd.

TriWest Capital Partners

Vistara Capital Partners

Westcap Mgt. Ltd

Western Investment Company of Canada Limited

XPND Capital

Private Equity & LSVCC FirmsAlberta Enterprise Corporation

Alberta Teachers’ Retirement Fund (ATRF)

BDC Venture Capital

Bluesky Equities

Caisse de dépôt et placement du Québec

Desjardins Capital

Fondaction

Fonds de solidarité FTQ

Fonds de solidarité FTQ (Regional)

Investissement Quebec

Kensington Capital Partners Ltd.

Northleaf Capital Partners

Ontario Teachers’ Pension Plan (OTPP)

Teralys Capital

Limited Partners


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FOREWORD

CAD $1.7B Invested in Q2; Larger Cheque Sizes Drive Strongest Q2 Performance on CVCA Records

CAD $1.7B was invested over 145 deals in the second quarter of 2020 which is 23% higher than the same quarter in 2019 ($1.35B) and more than double the amount invested in Q1 2020 ($818M). This was the highest investment in a second quarter since the CVCA began collecting industry data in 2013.

Large deal sizes (CAD $20M+) drove most of the dollars invested in H1 2020 which accounted for 69% of the total dollars invested. 11 mega-deals (CAD $50M+) closed in Q2 2020, totalling $884M invested. As a result, the average deal size in Q2 2020 was CAD $11.45M; 56% higher than the average deal size during the five-year period between 2015-2019 (CAD $7.3M).

Later stage Canadian companies received 50% of all funding (CAD $1.2B) in the first half of 2020, a sharp increase compared to the share of funding later stage companies collected last year with only 22%.

“VC investment activity in Q2 was driven by government stimulus coupled with a slight adjustment in valuation,” said Kim Furlong, CEO, Canadian Venture Capital and Private Equity Association. “We saw fewer deals, larger

injections in portfolio holdings and VCs reviewing and re-evaluating deal flow that they may had passed on last year. The key is that VCs are continuing to invest.”

There were 13 mega-deals (CAD $50M+) in the first half of 2020, which accounted for a 43% share of total dollars invested. The largest was Vancouver-based AbCellera’s $144M Series B Round from a consortium of US investors and a strategic corporate investor.

There were 13 mega-deals (CAD $50M+) in the first half of 2020, which accounted for a 43% share of total dollars invested. Included in the mega-deals was Kitchener-based Miovision’s CAD $120M founding round led by TELUS Ventures with participation from previous investor, McRock Capital.

VC-backed exits picked up in second quarter, with an additional 7 exits closed. However, VC exits remain slow in comparison to previous years, with only 10 M&A exits in the first half.

PE in 2020 is pacing along the 2015-2019 average


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VENTURE CAPITAL HIGHLIGHTS // H1 2020

Key Findings $1.7B was invested over 145 deals in the second quarter this year

which is 23% higher than the same quarter in 2019 ($1.35B) and more than double the amount invested in Q1 2020 ($818M)

Large cheque sizes ($20M+) drove most of the dollars invested in H1 2020, accounting for 69% of total dollars invested

A total of 11 mega-deals ($50M+) closed in Q2 2020, totalling $884M invested. As a result, the average deal size in Q2 2020 was $11.45M; amounting to a 28% increase from Q2 2019 and 56% higher than the average deal size during the 5-year period between 2015-2019 ($7.3M)

H1 2020 showed a total of 13 $50M+ mega-deals overall, which accounted for a 43% share of total dollars invested. The largest of these was:Vancouver-based AbCellera’s $144M Series B Round from a

consortium of US investors and a strategic corporate investor62% of deal flow (163 out of 264 deals) was less than $5M with 51

deals between $5M-$20M totaling $507M

Ontario-based companies received 42% of investment ($1B); Quebec-based companies received a 24% ($599M) share followed by BC-based companies with 22% ($555M)

ICT companies grabbed 53% of total dollars invested in H1 2020 ($1.3B over 145 deals) with life sciences companies receiving a 29% share ($722M over 47 deals)

Later stage companies received 50% of all funding ($1.2B over 42 deals), a sharp increase in comparison to the share of funding later stage companies collected in 2019 with only 22%.

The pace of VC-backed exits picked up in Q2, with an additional 7 exits closed. VC exits remain slow in comparison to previous years, with only 10 M&A exits in the first half.Among the exits was inovia Capital-backed North, Inc., acquired

by Google for a reported $180M.


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90

8142

27

$599M$1B

Ontario

$555MBritish

Columbia$197MAlberta

Québec

Nova Scotia$27M

New Brunswick$5M$29M

Manitoba

Newfoundlandand Labrador

$3M

4

7 6

5

1

1

Prince Edward Island$6M

$8MSaskatchewan

VENTURE CAPITAL HEAT MAP // H1 2020

$2.5Btotal

264 dealstotal #


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QUARTER-OVER-QUARTER VC INVESTMENT ACTIVITY

$0

$250

$500

$750

$1,000

$1,250

$1,500

$1,750

$2,000

$2,250

$2,500

0

20

40

60

80

100

120

140

160

180

200

Q2Q1

$940

$703

Q3

$717

Q4

$839

$818

$1,6

60

Q2Q1

$592

$864

Q3$1

,114

Q4

$1,0

55

Q1

$629

Q2 Q3

$1,0

70

$710

Q4

$1,2

68

Q1 Q1 Q2

$897

Q2

$1,3

50

Q3

$2,4

14

Q4

$1,5

06

125119

145145

124

134

104

120 118111

128

143

108

129

116

151

130

163

TOTAL:528 DEALS

$3.2B

TOTAL:453 DEALS

$3.6B

TOTAL:508 DEALS

$3.7B

TOTAL:560 DEALS

$6.2B

TOTAL:264 DEALS

$2.5B

$ Millions Invested # Deals

2016 2017 2018 2019 2020


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VC ACTIVITY BY DEAL SIZE // H1 2020

Total Deals $ Millions

< $100K

$100K - $500K

$500K - $1M

$1M - $5M

$5M - $20M

$20M - $50M

$50M +

12

41

25

85

51

22

13

$1

$14

$21

$216

$507

$643

$1,077

$50M+DealsAccounted for 43%

OF TOTAL DOLLARS INVESTED


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TOP 10 DISCLOSED CANADIAN VC DEALS // H1 2020

company name province Disclosed VC Firm(s) sector stage $ mil

ABCELLERA BC DCVC BIO, VIKING GLOBAL INVESTORS, PRESIGHT CAPITAL, STRATEGIC CORPORATE INVESTORS, ANGEL INVESTORS LIFE SCIENCES EARLY STAGE $144

MIOVISION TECHNOLOGIES INC. ONTARIO TELUS VENTURES, MCROCK CAPITAL ICT LATER STAGE $120

APPLYBOARD ONTARIOPLUG AND PLAY LLC, ARTIMAN VENTURES, BDC CAPITAL GROWTH & TRANSITION CAPITAL (BDC GTC), ANTHOS MANAGEMENT, LLC, FMR LLC (FIDELITY), DRIVE CAPITAL

ICT LATER STAGE $100

HOPPER QUEBEC WESTCAP, BDC IT VENTURE FUND, INVESTISSEMENT QUEBEC, CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC, OMERS VENTURES ICT LATER STAGE $98

VENTUS THERAPEUTICS QUEBEC VERSANT VENTURES, GV LIFE SCIENCES EARLY STAGE $81

SYMEND ALBERTASILICON VALLEY BANK, INOVIA CAPITAL, IGNITION PARTNERS, IMPRESSION VENTURES, BDC CAPITAL WOMEN IN TECHNOLOGY FUND, MISTRAL VENTURE PARTNERS, TELUS VENTURES, BMO CAPITAL PARTNERS

ICT LATER STAGE $73

TOP HAT ONTARIOGEORGIAN PARTNERS, INOVIA CAPITAL, UNION SQUARE VENTURES, EMERGENCE CAPITAL AND LEADERS FUND, BMO TECHNOLOGY AND INNOVATION BANKING GROUP

ICT LATER STAGE $72

WORKJAM QUEBEC INOVIA, FONDS DE SOLIDARITÉ FTQ, CLARIDGE, LERER HIPPEAU, BLUMBERG CAPITAL, HARMONY PARTNERS ICT LATER STAGE $71

ADA SUPPORT ONTARIO ACCEL, BESSEMER VENTURE PARTNERS, FIRSTMARK, VERSION ONE, LEADERS FUND, AND BURST CAPITAL ICT EARLY STAGE $64

UNBOUNCE ONTARIO CREST ROCK PARTNERS ICT EARLY STAGE $52

There were 3 undisclosed deals totalling 202.8M ommitted from this table.


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TOP 10 CANADIAN CITIES ADMINISTRATIVE CENTRES // H1 2020

68 DEALSTotal Deals $ Millions

1. Toronto

2. Montréal

3. Vancouver

4. Calgary

5. Edmonton

6. Kitchener, Waterloo, Cambridge

7. Ottawa

8. St. Johns - NL

9. Halifax

10. Victoria

68

63

33

17

10

8

7

5

5

4

$531

$563

$499

$185

$12

$311

$90

$3

$2

$19

1

10

9

6

4

5

2

7

8

#1 toronto $531M

3


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VC SECTOR BREAKDOWN // 2016 - H1 2020

0

40

80120

160

200

240

280

320

400

360

440

480

$0

$300

$600

$900

$1,200

$1,500

$1,800

$2,100

$2,400

$2,700

$3,000

$3,300

$4,000

$2,

259

2017 2018 2018 201820182016 20172016 201720162016

$1,9

14

$20

8

$18

5

2017 2019 201920192019 H12020

H12020

H12020

H12020

322

269

104 $

723

$67

2

$72

2

92 95

119

4328

145

4927 29

2722 29

$27

8

$41

4

$94

300

316

$64

6

$2,

428

$4,

028

$1,0

51

$18

5

$16 $

158

$40

0

$33

$1,3

08

478 6

ICT CLEANTECHLIFE SCIENCES AGRIBUSINESS



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VC STAGE BREAKDOWN // 2016 - H1 2020

$0

$250

$500$750

$1,000

$1,250

$1,500

$1,750

$2,000

$2,250

$2,500

$2,750

$3,000

20172016 20172016

$212

$1,5

94

$1,9

53

$1,3

53

20182018

262

232

192

8511979

42

$1,4

22

59$236

2019 H12020

$310

$251

2019 H12020

20172016 2018 2019 H12020

2019 H12020

$1,5

64

$1,3

68

$1,2

30

$59

$1,5

45

98

263

98

178

154

177194

25

5 0

30

60

90120

150

180

210

240

300

270

330

360

$2,7

42

$1,7

25

$199

$991


SEED LATER STAGEEARLY STAGE GROWTH EQUITY


source:

$33M$50mOntario

$46MBritish

Columbia$1M

AlbertaNA

Saskatchewan

NANova Scotia

Québec

$2MNew

Brunswick

2

2

1

18

8

12

VENTURE DEBT* HEAT MAP // H1 2020

$132mtotal 34 deals

total #

* VC Debt deals are not included in the overall Canadian VC activity


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VC EXITS // 2016–H1 2020

IPO/RTO**

$0

$300

$600

$900

$1,200

$1,500

$1,800

$2,100

$2,400

$2,700

$3,000

0

5

10

15

20

25

30

35

40

50

45

20172016 20172016

$584

$1,0

65

20182018

$1,0

33

$1,4

29

2019 H12020

2019 H12020

32

0 033

33

3936

2

10

$2,15

0

$1,6

00

$2,4

62

$278

Exit Value ($ Millions) # Exits * Includes transactions with undisclosed values ** IPO valuation

M&A*


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TOP DISCLOSED VC EXITS // H1 2020

There were 8 undisclosed VC Exits totalling $25.8 million in H1 2020.

vc investors company acquired by close date $ mil.

INOVIA NORTH INC. GOOGLE 2020-06-30 $180

FIRST ASCENT VENTURES RUBIKLOUD KINAXIS 2020-06-30 $81


source:

MOST ACTIVE VC FIRMS // FUNDS // H1 2020

MOST ACTIVE PRIVATE INDEPENDENT FIRMS # ROUNDSSIZE OF TOTAL

ROUNDS*(CDN$ MIL)

VB 18 $81

INOVIA CAPITAL 15 $649

REAL VENTURES 14 $62

Round 13 Capital Inc. 12 $26

CYCLE CAPITAL MANAGEMENT/ECOFUEL 11 $56

PANACHE VENTURES 9 $47

BRIGHTSPARK CAPITAL 7 $20

BLUESKY EQUITIES 6 $13

MOST ACTIVE GOVERNMENT FUNDS # ROUNDSSIZE OF TOTAL

ROUNDS*(CDN$ MIL)

BDC CAPITAL 38 $549

MARS IAF 15 $35

BDC INDUSTRIAL, CLEAN AND ENERGY TECHNOLOGY (ICE) VENTURE FUND 10 $121

INVESTISSEMENT QUEBEC 10 $117

BDC IT VENTURE FUND 8 $355

NEW BRUNSWICK INNOVATION FOUNDATION 8 $1

MOST ACTIVE PENSION, RETAIL, CORPORATE & OTHER PUBLIC FUNDS # ROUNDS

SIZE OF TOTAL ROUNDS*

(CDN$ MIL)

DESJARDINS CAPITAL 18 $113

TELUS VENTURES 5 $220

FONDS DE SOLIDARITÉ FTQ 5 $107

MOST ACTIVE FIRMS IN VC DEBT DEALS # ROUNDSSIZE OF TOTAL

ROUNDS*(CDN$ MIL)

DESJARDINS 9 $28

CIBC INNOVATION BANKING 8 $52

VENBRIDGE 7 $2

ESPRESSO CAPITAL 3 $4* Total deal values - includes all participating investors

# Rounds

BDC Capital

Desjardins Capital

inovia Capital

MaRS IAF

Real Ventures

Round 13 Capital Inc.

Cycle Capital Management/Ecofuel

Investissement Quebec

Yaletown Partners

Panache Ventures

381815151412111099

Size of Total Rounds* (Cdn$ mil)

$549 $113 $649 $35 $62 $26 $56 $117 $67 $47


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CVCA METHODOLOGY // VENTURE CAPITAL

VENTURE CAPITAL DATA:Verified completed equity, quasi-equity venture capital and venture debt deals only (non-equity or project-based government funding, pharmaceutical development deals, venture capital-backed acquisitions, and angel financing are not included)

VENTURE DEBT SHORT-TO-MEDIUM TERM, NON-DILUTIVE DEBT INSTRUMENT WITH NO EQUITY RIDER.

SEED STAGE COMPANY HAS A CONCEPT OR PRODUCT UNDER DEVELOPMENT, BUT IS PROBABLY NOT FULLY OPERATIONAL.

EARLY STAGE COMPANY HAS A PRODUCT OR SERVICE IN TESTING OR PILOT PRODUCTION. IN SOME CASES, THE PRODUCT MAY BE COMMERCIALLY AVAILABLE.

LATER STAGE PRODUCT OR SERVICE IN PRODUCTION AND COMMERCIALLY AVAILABLE. COMPANY IS GENERATING ON-GOING REVENUE, BUT NOT NECESSARILY, PROFITABLE.

GROWTH SIGNIFICANT MINORITY INVESTMENT TO DRIVE GROWTH AND SCALE WHICH CAN BE COMBINED WITH A SECONDARY TRANSACTION TO FACILITATE LIQUIDITY FOR EXISTING VC INVESTORS

ICT COMPUTER HARDWARE AND SOFTWARE AND SERVICES, INTERNET SOFTWARE OR SERVICES, ECOMMERCE, ELECTRONIC & SEMICONDUCTOR, MOBILE AND TELECOM TECHNOLOGIES AND SERVICES.

LIFE SCIENCES BIOTECH, MEDICAL DEVICES, PHARMACEUTICALS, EHEALTH, HEALTHCARE PRODUCTS AND SERVICES, AND OTHER MEDICAL RELATED PRODUCTS AND SERVICES.

CLEANTECH ENERGY AND FUEL TECHNOLOGIES, EFFICIENCY AND CONSERVATION, RENEWAL ENERGY, ENVIRONMENTAL TECHNOLOGIES AND OTHER ENERGY AND ENVIRONMENTAL PRODUCTS AND SERVICES.

AGRIBUSINESS TRADITIONAL AND ADVANCED AGRICULTURAL TECHNOLOGIES AND SERVICES

vc development stages

vc sectors

ABOUT AND CONTACT To obtain estimates for additional custom CVCA Intelligence data reports please contact [email protected]

About CVCAOUR VISIONA thriving Canadian economy driven by private capital

OUR MISSION CVCA’s mission is to help our members fuel the economy of the future by growing the busi-nesses of today. We do this by supporting and connecting a vibrant private capital industry with advocacy, research, and education.

CVCA is also the nation’s ultimate resource for data on Canadian private capital investments.

Please visit cvca.ca

@CVCACanada CVCA

CVCA - Canadian Venture Capital and Private Equity Association

372 Bay St., Suite 1201 Toronto, ON M5H 2W9

Authorsdavid kornacki associate, research & [email protected]

jon jackson head of [email protected]

IZADELLA STA. ROMANA MARKETING & BRAND [email protected]

VENTURE CAPITAL CANADIAN MARKET OVERVIEW // H1 2020 · 2020. 8. 25. · VENTURE CAPITAL CANADIAN...

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