Osler Deal Points Report: Insights into Venture Capital Deals and Financings

April 7, 2022 Entrepreneurs, Start-ups, Small Businesses, FinTech and Alternative Finance, Fundraising, Investing, Trading, Innovation and Resources, Research, Venture Funding and Building No comments

Osler | Michael Grantmyre, Natalie Munroe, Ryan Unruch, David Jamieson, André Perey | Mar 22, 2022

Introduction to the Deal Points Report

Welcome to Osler, Hoskin & Harcourt LLP’s inaugural annual comprehensive report on venture capital and growth equity financing transactions in the emerging and high growth companies ecosystem: the Deal Points Report: Venture Capital Financings.

The report synthesizes data from 332 venture capital and growth equity preferred share financings completed by Osler from 2019 to 2021, representing more than US$5.68 billion in total transaction value. The report is unique within the market as it draws on both publicly available data, as well as Osler’s confidential anonymized data sources, to deliver deeper access to comprehensive financing-related data.

See: Crowdfunding is Now a Serious Way for Private Ventures to Raise Capital

Select Highlights from the Deal Points Report

There was a marginal decline in series A financings which is consistent with findings from other Canadian reports, such as those prepared by the Canadian Venture Capital and Private Equity Association (CVCA) and CPE Analytics.
While 2020 saw a material increase in Series Seed and Series A financings and fewer Series B and later stage financings, the data for 2021 shows significant increases in Series B and other later stage financings, with only marginal declines in Series Seed and Series A financings.
Companies in the Information Technology industry (including artificial intelligence, blockchain, adtech, edtech and cybersecurity) made up over 39% of all companies raising a financing round covered by the Deal Points Report, with Consumer / Retail based companies having the second highest concentration of financings, representing 19% of the financings covered by the Deal Points Report.

Osler has undertaken publishing the Deal Points Report as we believe this data should be available to all stakeholders within the emerging and high growth companies ecosystem.

See: Decentralizing Venture Capital: DAO

Ontario and British Columbia have the highest concentration of companies raising a financing round – representing, respectively, 58.7% and 18.2% of all Canadian companies included in the Deal Points Report. This is consistent with the recent Year-End 2021 – Canadian VC & PE Market Overview released by the CVCA, which highlights a high concentration of investments in emerging and high growth companies located in Ontario and British Columbia.
Steady increase in the number of companies founded by women at the seed financing stage covered by the Deal Points Report from 13.5% in 2019 to 20.5% in 2021, and overall representation of women founded companies in approximately 15% of all financings covered by the Deal Points Report.
Pricing direction for financings – Up, Down and Flat rounds –generally aligned with U.S. reports, such as Fenwick’s Silicon Valley Venture Capital Survey [PDF] and Wilson Sonsini’s The Entrepreneurs Report [PDF]. In our Deal Points Report, 88.2% of financings covered were Up Rounds, with only a minority of transactions (7.2%) being Down Rounds.
Valuations for companies in the Information Technology industry (including artificial intelligence, blockchain, adtech, edtech and cybersecurity) represented significant valuation increases between financings of, on average, 235%.
The overall timing to close a financing, measured from the date a term sheet is executed until the initial closing date of the financing has steadily declined from 2019 to 2021, from 62 days to 52 days.

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