Canadian VC hits 16-year high in 2017 as top deals raise $1 bln


U.S. economy

For Canada’s venture capital market, 2017 was a remarkable year.

The story is told partly in milestones. They include the largest financing of a local IT company in 25 years (Lightspeed); the largest round on record for an artificial-intelligence startup (Element AI), and strategic funding of a top maker of laser sensors used in self-driving cars (LeddarTech).

They were among Canada’s top 10 venture-capital financings last year, which together raised more than $1 billion from investors. That’s 9 percent shy of the $1.1 billion that went into the top 10 deals in 2016.

The number is based on PE Hub Canada’s list of the largest deals announced in 2017, supplemented by preliminary data from Thomson Reuters. It points to a second consecutive year of historic round sizes.

Financings sized above $20 million secured $2.3 billion last year, the highest amount since 2000, while financings sized above $50 million took $1.5 billion, the highest ever.

As a result, cash flowing into Canadian technology sectors hit $3.8 billion last year, edging out by 5 percent the $3.6 billion invested in 2016. If the former statistic holds in Thomson Reuters’ final data cut, 2017 will mark a 16-year high in VC invested, as well as a sixth straight year of growth in the domestic market.

The benefits appear to be shared widely across the innovative ecosystem. IT companies attracted $2.3 billion last year, the largest amount invested since the dot.com era, while life-sciences companies took more than $1 billion, which is on par with 2016’s record deployment.

1) Lightspeed (Montréal)

In 2017’s biggest deal, Lightspeed, a point-of-sale solution for retailers and restaurants, raised $207 million (US$166 million) in a Series D financing. The round was led by Caisse de dépôt et placement du Québec, which bought out Accel Partners. Investissement Québec, iNovia Capital and Silicon Valley Bank also invested.

2) Element AI (Montréal)

Artificial-intelligence-solutions company Element AI secured more than $137 million (US$102 million) in a Series A. DCVC led and was joined by Real Ventures, BDC Capital, Fidelity Investments, Hanwha Investment, Intel Capital, Microsoft Ventures, National Bank of Canada, Nvidia, Tencent and sovereign-wealth funds.

3) LeddarTech (Québec City)

LeddarTech, a maker of laser-sensor technology used in self-driving cars, garnered almost $130 million (US$101 million) in a Series C round. Strategic investor Osram led. It was joined by Delphi, Magneti Marelli, IDT and Fonds de solidarité FTQ. The company’s other backers include BDC Capital and Go Capital.

4) PointClickCare Technologies (Toronto)

Healthcare-software company PointClickCare Technologies decided early in 2017 to postpone an initial public offering and instead raise about $111 million (US$85 million). The follow-on deal was led by Dragoneer Investment Group with participation from JMI Equity, which has backed PointClickCare since 2011.

5) Repare Therapeutics (Montréal)

Repare Therapeutics, a developer of precision oncology drugs, emerged from stealth this year to collect about $90 million (US$68 million) in a Series A financing. Versant Ventures and MPM Capital led the round. Fonds de solidarité FTQ, Celgene and BDC Capital were among the other investors.

6) eStruxture Data Centers (Montréal)

Launched in mid-2017, eStruxture Data Centers took initial funding led by Canderel and Caisse de dépôt et placement du Québec. The deal provided the network and cloud-neutral data centre operator with $80 million, used in part to buy Netelligent Hosting Services and the Montreal Gazette‘s former printing facility.

7) Vision Critical (Vancouver)

W Capital Partners and Georgian Partners acquired shares from early investors in Vision Critical, a customer intelligence software platform. The secondary deal had a reported value of $76 million. Vision Critical’s other backers include Difference Capital Financial, Kensington Capital Partners, Northleaf Capital PartnersOMERS Ventures, TELUS Ventures and Wellington Financial.

8) Wealthsimple (Toronto)

Online investment manager Wealthsimple accounted for $70 million in two funding events. Early in 2017, it secured $20 million from Power Corp’s Portag3 Ventures, the company’s majority shareholder. Several months later, Portag3 followed up with a $50 million Series B investment. Wealthsimple is also backed by Impression Ventures.

9) Milestone Pharmaceuticals (Montréal)

Clinical-stage cardiovascular company Milestone Pharmaceuticals received more than $68 million (US$55 million) in a Series C. The round was led by Novo Holdings with participation from Forbion Capital Partners, Tekla Capital Management, Domain Associates, Fonds de solidarité FTQ, BDC Capital, Pappas Capital and GO Capital.

10) Visier (Vancouver)

Visier, a workplace-intelligence-solutions provider, raised about $60 million (US$45 million) in a Series D financing. Sorenson Capital led the round. It was joined by Foundation Capital, Summit Partners and Adams Street Partners, all of which invested in the company’s Series C in 2014.

Note 1: Fusion Pharmaceuticals, a developer of radiotherapeutics for treating cancer, closed a US$46 million Series A in two tranches, giving the Hamilton, Ontario company about $57 million according to prevailing exchange rates. The investors included Adams Street Partners, Genesys Capital, HealthCap, JJDC, Seroba Life Sciences and TPG Biotech.

Note 2: Aurinia Pharmaceuticals, a Vancouver clinical-stage biopharmaceutical company, closed a public offering of about $231 million (US$173 million). Of that amount, $53 million came from Lumira Capital and other private investors (source: CVCA).

Photo courtesy of Peshkova/iStock/Getty Images

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