Venture capital investment in Canadian technology companies increased its pace in Q3 2019, with $2.8 billion deployed across 151 rounds, bringing total investment for the first nine months of the year to $5.6 billion. This marked the most active first three quarters in a year in dollar terms on record, according to final data released by Refinitiv. The number of financings in the third quarter was also up 34 percent year over year, while volumes in the first nine months rose 11 percent. Late-stage companies accounted for 29 percent of all rounds at the end of September, the third largest share ever.
A full PDF report of Q3 2019 Canadian venture capital market activity by Refinitiv is available here.
REPORT SUMMARY (reproduced courtesy of Refinitiv)
Canadian VC Market Trends
Canada venture capital investment totals $5.6 Billion during first nine months of 2019
Canadian venture capital activity reached record levels in Q3 2019, pulling away from its already healthy pace through the first half of the year. With $2.8 billion invested across 151 rounds, the third quarter of 2019 was the strongest quarter recorded for venture capital activity by dollars invested, surpassing the previous record of $2.1 billion in Q4 2000. Total venture capital investments in Canada reached $5.6 billion across 449 rounds, the strongest first three-quarter period by venture dollars since 2000.
Nine venture capital rounds over $100 million were completed during the first nine months of 2019, with six of those occurring between July and September. This includes the four largest deals so far during 2019, all of which took place in September. These rounds were led by St. John’s-based financial crime management software Verafin, which raised $515 million. The other top rounds for the month included legal software company Clio raising $331 million, artificial intelligence company Element AI raising $195 million, and restaurant POS software TouchBistro raising $153 million.
Firms headquartered within the United States invested $2.4 billion in Canadian companies through the end of September, a 50% share of all disclosed dollars. This topped the $2.0 billion, or 42% of funds, contributed by domestic sources and marks the first time that investments from the United States exceeded those from Canadian investors during the first nine months of 2019.
A total of 33 Canadian VC funds recorded closes during the first nine months of 2019, raising a combined $3.8 billion in commitments, an increase of 125% compared to a year ago, a record period venture fundraising by dollars raised. Fundraising figures were led by firms iNovia, Radical Ventures, OMERS, and Northleaf, all of which raised more than $300 million. Funds focusing on early stage investments made up the bulk of the closings, with a 59% share in both the number of funds and dollars committed.
Canadian companies completed 38 VC-backed exits during the first nine months of 2019, totaling $1.9 billion in deals and posted a 276% increase by value and a 31% uptick by number of exits compared to a year ago.