New report from LSEG shows where venture capital money has been focused so far this year
Canadian venture capital activity picked up in the first half of 2023 according to a new report from LSEG’s Refinitiv data.
Activity was up 7% year-over-year to $4.6 billion but deal volumes were down 26%. The VC space has been challenging due to economic conditions and uncertainty and a strong focus on the Asia Pacific region, as highlighted in a recent industry report. By the end of the first quarter of 2023, 46% of VC investors were targeting Asia Pacific, up from 32% a year earlier according to Preqin.
LSEG’s data shows that technology was the leading industry for Canadian VC deals in the first half of 2023 with a 62% of market share. Tech firms saw $2.9 billion in deal values across 342 transactions with the $360.5 million investment into the software & IT Services company, Cohere Inc. the top round for the period.
Companies in the Healthcare sector raised $5.9 million.
There were nine VC fund closes in the first half of 2023 with $1.6 billion in commitments led by the C$300 million closing of Vertu Partners Fund l.
The report shows that Canadian companies completed five VC-backed exits totaling C$1.8 billion during first half of 2023, a 54% decline in the number of exits and 39% drop in values when compared to first half of 2022.
Resilient industry
Despite continued challenges, the Canadian VC landscape remains robust and resilient, as highlighted by the Business Development Bank of Canada earlier this year.
"In the next cycle of venture investing in Canada, resiliency and prudent management of capital will play a key role" said Jérôme Nycz, executive vice president at BDC Capital. "Our industry has progressed significantly over the past decade, including through diversification, a growing number of established GPs and increased interest from foreign investors in the asset class.”
