Canada bucks trend with 7% climb in VC deals

When it comes to the deal activity of companies backed by venture capital (VC), Canada bucks global declines.

In 2016, VC-backed company deals rose 7% in 2016 to 266 deals, reveals a report from PwC Canada and CB Insights. Total dollars invested were US$1.7 billion, which roughly matches 2015’s figure.

Both trends contrast significantly with the global picture, where deals declined 10% in 2016, and total funding dropped 23%.

Hot sectors for deals were Internet, which accounted for 43% of Canadian funding, and mobile and telecom, which knocked healthcare to third place in 2016. In dollar terms, Internet funding rose 3%; mobile and telecom funding, 5%. Healthcare fell 34%.

Further, the report identifies three “thematic areas of interest” for funding:

• Internet of things (IoT) — for example, IoT-enabled wearables company Thalmic Labs, based in Waterloo, secured US$120 million in financing.

Read: 2017 investment preview

• Fintech — though financing fell 3%, fintech still saw a robust US$274 million in financing.

Read: SEC approves Wealthsimple for U.S. launch

• Digital health — although deals slipped in 2016, total funding spiked 130%, boosted by US$25 million in funding to League, a digital benefits startup.

Read: How to invest in 2 promising biotech areas

Download the report here.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.