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Record $1.7 Billion Venture Capital Invested in Over 145 Deals in Q2 2020 Sets New Record for Canada
Wednesday, August 26, 2020
CAD $1.7B Invested in Q2; Larger Cheque Sizes Drive Strongest Q2 Performance on CVCA Records
Later stage companies received half of all funding in the first half of 2020
Toronto, ON, August 26, 2020--(T-Net)--$1.7B was invested over 145 deals in the second quarter of 2020 which is 23% higher than the same quarter in 2019 ($1.35B) and more than double the amount invested in Q12020 ($818M). This was the highest investment in a second quarter since the CVCA began collecting industry data in 2013.
Large deal sizes (CAD $20M+) drove most of the dollars invested in H12020 which accounted for 69% of the total dollars invested. 11 mega-deals (CAD $50M+) closed in Q22020, totalling $884M invested. As a result, the average deal size in Q22020 was CAD $11.45M; 56% higher than the average deal size during the five-year period between 2015 - 2019 (CAD $7.3M).
Later stage Canadian companies received 50% of all funding (CAD $1.2B) in the first half of 2020, a sharp increase compared to the share of funding later stage companies collected last year with only 22%.
"VC investment activity in Q2 was driven by government stimulus coupled with a slight adjustment in valuation," said Kim Furlong, CEO, Canadian Venture Capital and Private Equity Association."We saw fewer deals, larger injections in portfolio holdings and VCs reviewing and re-evaluating deal flow that they may had passed on last year. The key is that VCs are continuing to invest."
There were 13 mega-deals (CAD $50M+) in the first half of 2020, which accounted for a 43% share of total dollars invested. Included in the mega-deals was Kitchener-based Miovision's CAD $120M founding round led by TELUS-ventures with participation from previous investor, McRock Capital.
The pace of VC-backed exits picked up in Q2, with an additional 9 exits closed. VC exits remain slow in comparison to previous years, with only 10 M&A exits in the first half.
Two important VC-Backed IPOs were completed in Q2, both in the life sciences sector:
An additional notable exit was inovia Capital-backed North, Inc., which was acquired by Google for a reported $180M.
VC HIGHLIGHTS
PRIVATE EQUITYKEY FINDINGS
PE investment Up 33% in First Half of 2020 compared to H12019
PE in 2020 is pacing along the 2015 - 2019 average
PE performance is pacing along with the average between 2015 - 2019 in both deals and dollars invested (565 deals and CAD $21B) with $4.5B invested over 145 deals in the first half of 2020 —33% higher than the amount in the same period last year (CAD $3B).
There was a total of six mega deals (CAD $500M+) so far in 2020, totalling CAD $7B, 67% of total dollars invested (CAD $10.4B). 83% of PE deals were below $25M (198 out of 238 deals with disclosed values).
"Canadian PE investors continue to pursue transactions despite COVID-19," said Kim Furlong, CEO, Canadian Venture Capital and Private Equity Association. "As Canada and international business cautiously open back up, I am encouraged to see resilience and confidence from Canadian Private Equity investors. There may still be some uncertainty ahead, but there is also opportunity."
PE HIGHLIGHTS
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