The latest research from KPMG Canada reveals furious pace of venture capital activity in Canada and globally
Venture capital (VC) deals in Canada continued at a brisk pace for much of 2021 and set more than one new record.
New data from KPMG Canada reveals that there were 1,053 deals in the year with a combined value of $12.72 billion, beating the previous record high of 2019.
This was despite a significant drop-off in activity in the fourth quarter; a period which still managed to reach a new record high for any Q4 on record with deal value of $1.9bn (from 202 deals). Healthcare and fintech were the strongest sectors in this quarter.
The year also set a new record for corporate VC activity with 238 deals worth $6.1 billion, although the fourth quarter posted a notable slowdown after the previous three quarters with just 40 deals totalling $799 million.
Again, while there were a record number of IPOs across the whole year (135 IPOs totalling $8.5 billion), there was a slower pace in Q4 (27 exits worth $3.5 billion).
KPMG Canada noted that investors are being attracted to Canada in greater numbers thanks to the “maturing innovation ecosystem,” while high valuations, low interest rates and a near-22% rise in the S&P/TSX Composite Index.
Global VC
Canada was not alone in its strong year for VC activity and values.
Globally, KPMG reported that VC investment rose to a record US$671 billion across 38,644 deals in 2021.
The Americas led the charge with $361 billion across the year ($95.2 billion in the fourth quarter alone), compared to Europe’s $123 billion across 9,710 deals, and Asia-Pacific’s $181 billion across 10,498 deals. All three regions posted higher deal volume and values than in 2020.
“2021 was a remarkable year for the global venture capital market,” said Conor Moore, head of KPMG Private Enterprise in the Americas region. “The wealth of dry powder, combined with the continued involvement of non-traditional investors and powerful surge in exit activity have combined to propel venture capital investment in companies across all sectors to new heights, albeit the larger organizations able to chart better performance, raised the bigger funds.”
Moore is confident of 2022 continuing the momentum.
“We expect exit activity – both in terms of IPOs and mergers and acquisitions - will remain vibrant and continue to spur healthy valuations and deliver yet another year of strong investment in the venture ecosystem,” he said.
