The firm's Venture Pulse for Q2 shows continued dominance of AI investments
Canada’s venture capital ecosystem was boosted by four megadeals in the second quarter of 2023, helping a resurgence from the previous quarter.
KPMG’s latest Venture Pulse report reveals that VC funding in the three months reached US$2.079.9 billion, returning to pre-pandemic levels after almost a year of declining investment.
Dealmaking is still trending lower but the four megadeals – including one that was among the top 10 in the Americas for the period - confirm confidence in the Canadian VC space.
Artificial intelligence remains a key driver of VC investment with 46 deals in the second quarter of 2023, almost twice the level of the previous quarter.
“This heightened interest is likely attributed to some major announcements in the industry recently, further solidifying Canada's position as a global leader in AI research and innovation,” KPMG says.
However, AI was not the only industry trending higher with cleantech and agtech also attracting substantial funding, with 27 deals and 17 deals respectively in Q2.
As previously reported by Wealth Professional, VC continues to be a main investment source for Canadian fintech.
There was also an increase in corporate VC investment in the quarter with 46 deals valued at more than $1.1 billion, compared to 51 deals valued at $701.8 million seen in the previous quarter.
Overall exits activity was weaker though with just 18 in the three months to the end of June, with a combined value of $2.9 million.
Outlook?
The report has an optimistic tone for what’s to come for Canada’s VC landscape.
“As the economy continues to recover from the impacts of the pandemic, investors remain optimistic about the opportunities that lie ahead. The question is if this optimism will persist for the remainder of the year,” KPMG concluded.
The full Canadian VC Pulse is available at https://kpmg.com/xx/en/home/campaigns/2023/07/venture-pulse-q2.html
