Latest report from KPMG reveals strong venture capital investment in Q3, with activity 'right across the board'
Just as many of Canada’s office workers and financial professionals are discovering the benefits of flexible work arrangements, Canadian startups are starting to realize the possibilities of setting down roots in places outside prime regions for venture capital investment.
In the latest edition of its Venture Pulse Report, KPMG Private Enterprise said VC investment in Canada during Q3 moderated from the incredibly high levels seen in Q1 and Q2, which were fuelled by pent-up demand, significant amounts of dry powder, and a sense of euphoria across the market.
Nevertheless, the third quarter was a strong one from a historical standpoint. Drawing from Pitchbook data, the KPMG report said Canadian VC investment totalled US$2.62 billion, the third highest quarterly total on record. The all-time high in Canadian VC was set in Q2, when the space saw roughly US$4.5 billion in total deal value.
Activity-wise, the report said 202 deals were completed in Q3, down from 256 in the second quarter and 274 in the first. Over the first nine months of 2021, Canada’s venture capital ecosystem soaked in US$10.1 billion, nearly twice the previous annual record of US$10.1 billion set in 2019.
Slicing the data by sector, the report said there was continued investment strength across a wide range of sectors including healthcare, biotech, fintech, and travel. Nine companies were able to raise US$100 million or more, which means 30 separate companies have raised at least that much in the Canadian ecosystem
“In Canada’ we’re seeing a ton of activity right across the board,” said Sunil Mistry, partner at KPMG Private Enterprise. “We’ve seen Saskatoon, Edmonton, Vancouver, some outlying cities – all getting great investments.”
The natural next question for startups, Mistry said, is whether they really need to plant themselves in a tech hub in order to succeed. And if there’s anything that the last 18 months have shown, it’s that they really don’t.
“The reality is you can be anywhere – and that’s why we’re seeing more deals popping up in so many different places,” he said.
More broadly, KPMG Private Enterprise said VC investment across the world is still surging to new summits. Globally, VC-backed companies raised US$171.7 billion across 8,682 deals in Q3, primarily driven by late-stage deals.
