September 26th, 2018
More venture capital invested in Montreal than any other Canadian city in Q2
Almost half of all venture capital invested in Canadian companies between April 1 and June 30 went to Montreal-based businesses.
Buoyed by interest in artificial intelligence and a couple of big deals, Montreal-based companies raised US$189 million during the second quarter of 2017, according to a report released by PwC Canada and CB Insights, the creator of a data intelligence platform. (The report cites figures in U.S. dollars, as most venture capital deals are denominated in that currency.)
That’s more money than was invested in companies from any other city in Canada.
It’s also a 145 per cent increase from the previous three-month period when local companies raised $77 million in VC.
The money was spread across nine deals, with the lion’s share going to two companies — artificial intelligence firm Element AI, which raised $102 million, and cancer drug developer Repare Therapeutics, which raised $68 million. Those were the two biggest VC deals in Canada during the quarter.
“Montreal is really placing itself to have great success in the artificial intelligence field, not just across Canada, but internationally,” said Andrew Popliger, an assurance, technology, media and telecom partner at PwC. “Governments, institutional investors, private investors, VCs — they’re all coming together to ensure that Montreal has an important place in the world in terms of artificial intelligence.”
While local companies may have raised more money during this period, there were fewer deals. During the first three months of the year, VC investors made 16 investments in local companies.
“Some quarters, you have a higher volume of transactions and lower value. I think when there are larger-value transactions, it’s definitely positive. These are companies with a lot of potential,” Popliger said.
Of the remaining seven deals, Popliger said many were “seed-stage” investments, which are small investments in young companies.
For Popliger, one of the most notable venture capital trends in Montreal during the quarter was the increased number of companies, and not just venture capital funds, investing in startups.
“I see that as one of the biggest positives coming out of the report,” he said.
It’s a sign that bigger companies believe in Montreal’s startup ecosystem and are willing to back it financially, he said, adding that it will lead to further economic growth.
“That’s really the key to success for the Montreal economy,” Popliger said.
Despite the positive signs, venture capital activity in Montreal was down from the second quarter of 2016, when local companies made 18 deals worth $195 million.
That mirrored a nationwide trend.
Across Canada, there were 58 venture capital deals during the quarter, worth a total of $400 million, down from 67 deals worth $529 million during the same period last year.
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