TLDR:
Key Points:
- Canadian venture capital totalled $1.38 billion in Q1, 2024.
- 74% of all VC investments in Q1, 2024 came from abroad, with the majority from the U.S.
Canadian venture capital investments in Q1, 2024 remained steady at $1.38 billion compared to the previous quarters. The investments were dominated by PIPE financings, biotech companies, and US mutual/hedge fund contributions. Five PIPE financings accounted for 35% of the total investment amount, with early-stage financings leading the way by raising 44% of the total. Biotech investments surpassed IT investments, with two large PIPE financings propelling biotech companies to receive $622 million. US mutual funds and hedge funds were the top investors, contributing $437.84 million to biotech PIPE financings. Provinces like Ontario, Quebec, BC, Alberta, and New Brunswick raised varying amounts of funding, with Ontario leading at $733 million. Company sizes with 0-49 employees received the most investment in the quarter, totaling 86% of the total amount. VC fundraising also recovered in Q1, 2024, with 17 funds raising $745 million, out of which 11 private VC funds led with $693 million capital raised.
However, a concerning trend was highlighted, with 74% of all VC investments coming from abroad, primarily from the U.S. This indicates a low contribution from Canadian sources, potentially showing a structural weakness in the industry. Despite the $1.38 billion investment, just under half of that amount was raised by Canadian VC funds, signaling a gap in meeting the demand for VC capital. On a positive note, biotech investing surged to an all-time high in Q1 compared to other sectors like IT and fintech. This information is crucial for stakeholders in the venture capital industry to address the challenges and opportunities presented by the current investment landscape.
