Canadian VC Activity Hits 14-year Low, Reuters

Claire Spencer, November 2009

(11 November 2009)

Activity in Canada’s venture capital market has hit a 14-year low in Q3 2009, with investment falling by 51 percent to $191m compared to the same period a year ago, according to data published by the Canadian Venture Capital and Private Equity Association (CVCA) and Thomson Reuters.

This suggests that investors are still unable or unwilling to invest – indeed, venture capitalists invested only $682m in the first nine months of the year, compared with $1.1bn in the same period in 2008. This means that total venture capital investment is likely to come in at below $1bn for the whole year – something which has not occurred since 1995.

The data also shows that the province of Ontario has been hardest hit, falling to $24m compared with $179m a year earlier.

Canadian venture capital activity is also down abroad, with funds investing only $38m in the third quarter, compared with $151m a year earlier, says the report.

Further, it is unclear as to when things will improve. “There is increasing frustration in finding co-investment partners to fully capitalise companies to be successful and compete globally,” noted Greg Smith, president of the CVCA, speaking to Reuters.