TLDR:
– After spikes in 2021 and 2022, investments in B.C. companies returned to pre-pandemic levels last year
– Around $1.2 billion in venture capital was raised across 92 deals in B.C. last year
After experiencing spikes in investments in 2021 and 2022, British Columbia saw a return to pre-pandemic levels of investment in 2023. Experts predict that investment activity is expected to either stabilize or grow mildly in 2024. In 2023, $1.2 billion in venture capital was raised across 92 deals in B.C., marking a 15% drop in deals and a 25% decline in total value compared to the previous year. On the private equity side, $458 million was raised across 67 deals, showing a 38% decrease in deals and a 51% decrease in value year over year.
The decrease in investment activity in 2023 was attributed to rising interest rates and economic uncertainty by the Canadian Venture Capital & Private Equity Association (CVCA). Despite the decline, B.C. ranked third in venture capital investment value in Canada and fourth in private equity investment, highlighting the province’s continued importance in the investment market. Technology, life sciences, and cleantech were the leading sectors in terms of provincial investment.
Experts expect investment levels in B.C. to remain steady in 2024 before potentially increasing in 2025. They anticipate a focus on business fundamentals, positive cash flow, and a shift towards smaller to medium-sized businesses in private equity investments. Artificial Intelligence was a significant driver in technology investment in 2023, with predictions that investments in cleantech and agritech will significantly grow in the coming years.
Vancouver-based BDC Capital Inc was noted as one of the most active firms in VC investment in Canada last year, investing over $1.66 billion across 68 rounds. The overall outlook for B.C.’s investment market is cautiously optimistic, with a focus on potential growth in various sectors in the coming years.
