Canadian VC begins 2019 with heft as top Q1 deals raise $667 mln

venture capital, Canada
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After nine straight years of growth, Canada’s venture capital market showed no signs of slowing down in early 2019.

The top 10 first-quarter VC financings drew $667 million from VC funds. While that’s down 28 percent from the $923 million raised by the top 10 deals a year earlier, it exceeds first-quarter results in other recent years, including the $638 million raised in Q1 2017.

The estimate is based on PE Hub Canada’s list of the largest rounds announced from January through March, supplemented by preliminary data from Refinitiv.

It suggests that despite increasing market uncertainty, trends in early 2019 reflect many of the same factors that drove soaring Canadian VC investment activity last year.

They include big rounds and a focus on late-stage tech companies.

Financings of $20 million or greater, many of them backing companies in scaling mode, secured 70 percent of VC invested in Q1 2019, up from the 60 percent averaged in all of 2018.

Another continuing theme is the key influence of cross-border investors. The largest foreign cohort, U.S. funds, accounted for 40 percent of dollar flows in the first quarter, compared with 38 percent last year.

Other preliminary data from Refinitiv point to a robust beginning to 2019.

The data show a total of $1.3 billion went to Canadian IT-software, life sciences and other tech sectors between January and March, not far below the amount invested a year earlier. That makes Q1 2019 the third most cash-intensive first quarter in the market’s history.

VC invested in Canada reached $4.7 billion in 2018, marking a nearly two-decade high, according to Refinitiv data.

1) Fusion Pharmaceuticals (Hamilton, Ontario)

Fusion Pharmaceuticals, a cancer radiotherapeutics specialist, raised $140 million (US$105 million) in a Series B round. OrbiMed and Varian Medical Systems led and were joined by Adams Street Partners, FACIT, Genesys Capital, HealthCap, JJDC, Perceptive Advisors, Pivotal bioVenture Partners, Rock Springs Capital, Seroba Life Sciences and TPG Biotech.

2) Vena Solutions (Toronto)

Vena Solutions secured $115 million in its latest financing, led by JMI Equity and with participation from Centana Growth Partners. Vena, a provider of cloud financial planning and analysis software, is also backed by Difference Capital Financial and Klass Capital.

3) Carbon Engineering (Squamish, British Columbia)

Carbon Engineering, a developer of technology that removes CO2 from the air, closed a $91 million (US$68 million) deal. The investors included billionaires Bill Gates, Murray Edwards and Peter Thomson as well as BHP, Chevron Technology Ventures, First Round Capital, Lowercase Capital, Oxy Low Carbon Ventures, Rusheen Capital Management and Starlight Ventures.

4) eSentire (Cambridge, Ontario)

Managed detection and response platform eSentire raised $62 million (US$47 million) in follow-on funding.  Warburg Pincus, the company’s majority investor since 2017, led the round. It was joined by minority investors Georgian Partners and Edison Partners.

5) Peraso Technologies (Toronto)

Fabless semiconductor company Peraso Technologies secured $56 million (US$42 million) in its latest financing. Two unidentified strategic investors and Roadmap Capital led this time around. Peraso’s other investors include Celtic House Venture Partners and Inovia Capital.

6) Turnstone Biologics (Ottawa)

Turnstone Biologics also landed $56 million (US$42 million) in an unpublished deal reported by Refinitiv and KPMG Enterprise. Turnstone, a maker of viral immunotherapies for treating cancer, is backed by FACIT, F-Prime Capital Partners, OrbiMed, Versant Ventures and others.

7) Fiix Software (Toronto)

Fiix Software, a maintenance and asset management software provider, closed a $53 million (US$40 million) Series C financing led by Georgian Partners. It was joined by BuildGroup, which led prior rounds. Fiix’s other investors include MaRS Investment Accelerator Fund.

8) TrackTik Software (Montréal)

TrackTik Software raised $45 million in follow-on funding. Backing the deal were Georgian Partners and Caisse de dépôt et placement du Québec. TrackTik, a security workforce management cloud solutions platform, also counts Inovia Capital and Klass Capital among its investors.

9) Sonrai Security (Fredericton, New Brunswick)

Sonrai Security, a provider of cloud data control and compliance solutions, was officially launched with a $25 million (US$18.5 million) Series A financing. Polaris Partners and TenEleven Ventures led, with participation from New Brunswick Innovation Foundation.

10) Avidbots (Kitchener, Ontario)

Autonomous connected robots maker Avidbots secured a $24 million Series B round led by True Ventures. Also contributing were existing investors 500 Startups Canada, GGV Capital, Real Ventures and SOSV as well as new investors BDC CapitalKCPL and Next47.