Foreign venture capitalists invest record amounts in Canadian innovation



“The entrepreneurial spirit is alive and well in Canada with foreign capital increasingly focused on financing promising ideas and businesses, ”says Sunil Mistry, partner, Private companies and technology, Media and telecommunications, KPMG en Canada. “While foreign investment is on track for record funding this year, we are also seeing Canadian VC firms become more active in later phases.

While there were concerns that the pandemic could put a damper on funding, it actually had an unexpected positive impact on the growth and financing of young Canadian businesses.

“We are seeing Canadian entrepreneurs attract world-class management teams and larger rounds of growth-stage funding, enabling them to create an increasing number of meaningful businesses globally,” said Dan Wilson, partner and national industry leader for technology at KPMG in Canada. “The switch to remote work also benefits them. They can now not only hire experienced leaders to help them grow, but also provide interesting opportunities for college or university graduates. The combination of attracting top talent and later stage capital translates into impressive milestone funding. “

Venture capital investment in the first quarter was more than double the $ 1.16 billion surveyed in the previous quarter and US $ 1.11 billion raised a year ago. The 1.82 billion US dollars of foreign investment follows US $ 3.29 billion surveyed throughout 2020 and a record 4.12 billion US dollars in 2019.

According to the KPMG Venture Pulse report, the first quarter rise was driven by five rounds of $ 100 million or more, spanning multiple industries, including the Dapper Labs blockchain platform, from Canada new unicorn, which raised US $ 350 million, and the mining exploration and production company High Power Exploration, which $ 200 million. Both are based at Vancouver. The other rounds involved Mississauga PointClickCare health software provider, Toronto-based on edtech Top Hat, and Oakville, Ont.based at Prodigy Education Inc.

Fintech, software as a service (SaaS), and consumer-centric digital solutions, from edtech and games to healthcare, continue to generate strong interest in VCs, the report notes.

First-quarter transactions totaled 157, of which 54 were angel or seed financings, 39 were early stage (those in the development stage) and the remaining 64 were later stages for more mature companies with growth and proven income but may or may not be profitable. In comparison, the fourth quarter transactions had more seed (63) and seed funding (57) and less follow-up (47) funding.

“As we saw in 2020, the impact of COVID-19 has not reduced investments in Canadian technology and other high growth sectors,” said Anuj Madan, partner and national sector leader, Technology, media and telecommunications, KPMG in Canada. “On the contrary, venture capital investment has reached new heights, solidifying from Canada position as a hub of innovation that creates global disruptors. While we are optimistic, this pace will continue through the second half of 2021, but we still expect investors to focus on the investments they have made over the past six months. “

The full KPMG in Canada Venture Pulse report is available here.

KPMG LLP, a limited liability company, is a full service auditing, tax and advisory firm owned and operated by Canadians. For more than 150 years, our professionals have provided consulting, accounting, auditing and tax services to Canadians, inspiring confidence, fostering change and fostering innovation. Guided by our fundamental values integrity, excellence, courage, together for the better, KPMG employs nearly 8,000 people in more than 40 sites across Canada, serving private and public clients. KPMG is regularly ranked one of from Canada top employers and one of the best places to work in the country.

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For further information: Caroline Van Hasselt, National Communications and Media Relations, KPMG in Canada, (416) 777-3288, [email protected]

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