Return of US investors to Canadian VC sector helped push total towards $2 billion
Canadian venture capital (VC) saw improvement in the second quarter of 2023, despite a generally muted picture for this investment sector globally.
Across the whole of the first half of 2023, a return of US investors helped boost Canadian VC with these investors accounting for 44% of funding, ahead of Canadians (40%) and other international funders (16%) according to CPE Analytics.
Overall, the second quarter posted $1.95 billion in disbursements, up from $1.3 billion in the first quarter. The first half of 2023 totalled $3.25 billion, down 62% from the same period in 2022.
Among the top industries invested in, ICT companies raised $1,91 billion or 59% of the total amount, while biotech and cleantech ranked as distant recipient sectors, raising $557 million and 483 million respectively.
Weak fintech investment
VC investment in fintech was weaker.
“Unsurprising, given that fintech investing has slowed down in a number of comparator jurisdictions but at the same time surprising given the intense competition in financial services,” said Richard Rémillard, President of Rémillard Consulting Group.
He added that Toronto only saw about one-third of venture capital investing dollars in Canada, although it did become Canada’s first $1 billion recipient city in the first half of 2023.
“This may be attributed to the decline in fintech, given Toronto's pre-eminent position in the financial services industry in Canada,” he said.
Small firms
The data shows that smaller companies, with 0-49 employees, raised $1.55 billion accounting for 48% of the total disbursements, while companies with 50-99, 100-499 and 500+ employees raised $596 million, 972 million and $133 million respectively.
Early stage and growth/late-stage financings raised $1.55 billion and $1.14 billion respectively.
