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Canadian VC Investment Levels Down Just 7% in Q1 2020, Says New CVCA Report
Thursday, June 4, 2020
CVCA's Q1 2020 VC Canadian Market Overview: Quarterly activity experiences a marked QoQ decline; further decline in VC investment in Q2 is anticipated due to COVID-19. VC-backed exit momentum also slowed in Q1 2020
Vancouver, BC, June 4, 2020--(T-Net)--The Canadian Venture Capital and Private Equity Association (CVCA) released today its Q1 2020 report on venture capital (VC) activity in Canada.
More than three-quarters of a billion dollars (CAD $831M over 117 deals) was invested in the first quarter of 2020, 7% lower than the same period in 2019 (CAD $897M). There was also a notable 45% quarter-over-quarter decline in activity which is the most pronounced drop in VC investment activity between the fourth and first quarters over the last five years.
"The venture capital investment performance in the first quarter demonstrates the health of the ecosystem in a pre-COVID-19 environment." said Kim Furlong, Chief Executive Officer, CVCA. "We expect to continue to see a drop in the second quarter and potentially the third as investors have increased their reserve funding for existing portfolio companies. Also, the challenges in conducting due diligence given social distancing may impact the number of deals that get done in the next few months."
There were three $50M+ mega-deals in the first quarter which accounted for a 30% share of total dollars invested. The largest of these was:
Information and Communication Technologies (ICT) companies received 54% of total dollars invested in Q1 2020 ($449M over 59 deals) with life sciences companies receiving a 21% share ($174M over 19 deals).
The pace of VC-backed exits in the 5-year between 2015-2019 (averaging 10 per quarter) slowed with only 3 undisclosed M&A exits in the first quarter.
Canadian Venture Capital Highlights
About the CVCA
Our vision: A thriving Canadian economy driven by private capital.
CVCA's mission is to help our members fuel the economy of the future by growing the businesses of today. We do this by supporting and connecting a vibrant private capital industry with advocacy, research, and education.
CVCA is also the nation's ultimate resource for data on Canadian private capital investments. Please visit: http://www.cvca.ca.
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