Canadian VC investment hits record in Q3

Thanks to a handful of big deals, Canada generated record levels of venture capital (VC) investment in the third quarter, according to a new report from KPMG LLP.

The firm said Canadian VC investment reached new heights in Q3, powered by a $250 million deal and a $151 million fundraising for a pair of software firms.

“These large deals highlight the growing focus of Canadian firms on the B2B market, in addition to solutions that align with Canada’s strong AI and machine learning capabilities,” the report said.

KPMG also noted that the record quarter highlights the growing maturity of Canada’s tech sector, and the increasing diversity of the venture market overall.

“The innovation ecosystems across Canada are maturing rapidly – not only in Toronto, Montreal, and Vancouver, but in other cities as well. We’re seeing larger and larger deal sizes, which is helping to increase the buoyancy of the VC market in the country,” said Sunil Mistry, partner with KPMG in Canada.

“VC investment will likely continue to be significant heading into [the fourth quarter] and into 2020,” he added.

Globally, VC investment held steady in the third quarter, KPMG reported, noting that a number of large deals also powered global activity.

The value of global VC activity is lagging last year’s record pace, which was inflated by a massive US$14 billion fundraising by Ant Financial — but KPMG said that 2019 is expected to rank second to 2018 by yearend.

“While VC investment in China may have slowed significantly, other regions have seen significant upticks in investment. Despite the significant uncertainty surrounding Brexit in the UK, for example, Europe has already exceeded 2018’s record level of VC investment – with one quarter remaining in the year,” it said.

The firm noted that the fintech sector, transportation, mobility, healthtech and biotech “are all expected to be hot areas of VC investment” on a global basis, notwithstanding intensified economic and geopolitical uncertainty.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.