Canadian Venture Investing Climbs 34% In 2011, But Fundraising Lags

Venture capital investments in Canada rose last year but remain well below the robust levels of 2007 with conservative investors favoring later stage deals over early ones.

Total investment for the year came to $1.5 billion, up 34% to a four-year high, according to a study from the Canadian Venture Capital & Private Equity Association and Thomson Reuters, publisher of this blog. Money went to 444 Canadian firms, a 24% increase from 2010.

In 2007, VCs dispersed $2.1 billion.

A substantial 71% of money went to late stage companies, the survey found. That was up from 59% in 2010. Early stage investment dollars were down 5%.

The Canadian market, like the US market, favors technology. Forty-six percent of the total commitments went to tech startups, with Internet and software companies leading the pack. Life sciences investments make up 23% of the total.

The market is being held back by fundraising. Firms raised $1 billion, up only 2%. Fourth quarter fundraising fell 15% from the same quarter a year ago.