BY Fraser Tennant
Canadian venture capital (VC) investment has hit record levels in 2021, with a year-to-date (YTD) total of CA$11.8bn, according to a new report by the Canadian Venture Capital & Private Equity Association (CVCA).
The YTD total, which includes $3.5bn invested across 174 deals in the third quarter (Q3), propelled 2021 beyond the previous highest annual VC investment of $6.2bn recorded in 2019.
In its report, ‘Q3 2021 Canadian Venture Capital Market Overview’, the CVCA reveals that the average deal size is a record-setting $20.7m – approximately double the $11m recorded in 2019 and the previous highest year on record. Moreover, the average growth-stage investment YTD in Q3 2021 was $129m, which has more than tripled over the last three years.
In addition, investments into later and growth-stage companies have received 63 percent of total VC dollars invested in Q3 2021, a significant increase from prior years (50 percent in 2019 and 49 percent in 2020).
In terms of deal size, there were 55 megadeals ($50m-plus) YTD, accounting for 74 percent of investment in 2021 so far. Notable megadeals in Q3 included Vancouver-based Dapper Labs’ $319m closing, Toronto-based Clearco’s $270m funding and the $265m investment in Montréal-based Blockstream.
“Investment in Canada’s startups has never been stronger,” said Kim Furlong, chief executive of the CVCA. “With the recent crop up of new continuation funds and the average growth stage investment rising, we are seeing a willingness to hold with investors as they stay the course in their investments — a testament to the maturing Canadian venture ecosystem.”
Concurrent with its 2021 VC investment analysis, the CVCA has also published a report into private equity investment in Canada over the same period – ‘Q3 2021 Canadian Private Equity Market Overview’ – which reveals a YTD total of $13.2bn invested across 584 deals.
“We are on the journey through post-pandemic recovery,” concluded Ms Furlong. “Some of the performance figures we are seeing in Q3 are trending towards pre-covid levels. The consumer and retail sector, for example, has seen some significant investment growth, at almost five times the levels experienced since a low in 2018.”