MONTREAL--(BUSINESS WIRE)--In the first half of 2016, the Québec investment landscape saw a surge in VC deals with $425M invested over 75 deals—double the amount of dollars invested in the same period in 2015 (68 per cent) where $253M was invested over 76 deals, indicates data compiled by the Canadian Venture Capital and Private Equity Association (CVCA) and published in partnership with Réseau Capital, Québec’s Venture Capital and Private Equity Association. The ICT sector led the way with $186M invested in H1 (44 per cent of the total dollars invested), followed closely by $176M in life sciences (41 per cent).
On the PE side, Québec captured nearly a third of all Canadian financings in the first half—an increase from 2015 (24 per cent) and 2014 (14 per cent), and now rivals Ontario (32 per cent) for PE investment. Since January 2016, Québec recorded 88 PE deals, which puts them on track to exceed the number of deals brokered in 2015. Newer sectors such as agri-forestry, cleantech and ICT have all been targets for private equity investment in the province.
“These are very encouraging results which demonstrate the vibrant investment ecosystem in Québec. We are hopeful that this will continue for the rest of the year,” said Jack Chadirdjian, President and Chief Executive Officer, Réseau Capital.
Québec was home to the largest VC deal in the first half of 2016—a record-breaking $128M investment in DalCor Pharmaceuticals, a CVCA life sciences record. Québec also saw the largest PE deal in H1—an $800 million investment in Services Matrec, a mega deal in the cleantech sector.
The surge in PE activity in Québec in the first half can be attributed to the high level of investment by either government entities or institutional investors. Seven out of the top 10 PE investors are either government entities or institutional investors, with average deal sizes ranging from $3M to $20M. The other three entities in the top 10 had average deal sizes between $15M to $30M.
“The Province of Québec has given itself a goal to be a leader on innovation,” added Chadirdjian. “We’re bustling with entrepreneurs that are on the cusp of success and the government’s innovation strategy will be a major boost in helping these businesses become leaders in their sector of activity.”
CVCA VC & PE Market Overview: H1 2016
Québec Venture Capital Highlights:
- $368M invested over 48 deals in Q2 , the highest amount in any quarter since 2013
- Record-breaking $128M investment in DalCor Pharmaceuticals—a CVCA life sciences record
- Average deal size in Q2 spiked to $7.7M, up 260 per cent from Q1 and up 72 per cent from the average 2015 deal size
- ICT sector received the largest share of H1 financing in the province (44 per cent), followed by Life Sciences (41 per cent)
- $219M or 52 per cent of investments were directed to early stage companies; $195M or 46 per cent of investments went to later stage companies
Québec Private Equity Highlights:
- Québec captured nearly a third of all PE financings in the first half—an increase from 2015 (24 per cent) and 2014 (14 per cent), and now rivals Ontario (32 per cent) for PE investment
- Services Matrec was the largest deal in the cleantech sector—$800M involving foreign investors
- Local institutional investors continued to be involved in the majority of activity—the largest was the $80M deal in Triotech Amusement Inc. involving both Caisse de dépot et placement du Québec and Fonds de solidarité FTQ
- The majority of deals were add-ons, $800M (46 per cent) followed by growth investments, $685M (39 per cent)
- Investissement Québec was the most active investor in Québec having invested in 41 deals totaling $137M
About Réseau Capital
Réseau Capital, the Québec Venture
Capital and Private Equity Association, is the only private equity
association that brings together all stakeholders involved in the Québec
investment chain. The mission of Réseau Capital is to contribute to the
development and efficient operation of the private equity industry,
which plays a major role in the development and financing of businesses
in Québec.
Founded in 1989, Réseau Capital has more than 425 members representing private equity, tax-advantaged and public investment companies as well as banks and insurance companies, accounting and law firms, along with many professionals working in the field. Please visit: http://www.reseaucapital.com
About the CVCA
The CVCA is the voice of Canada’s venture
capital and private equity industry. We are focused on improving the
private capital ecosystem by broadening industry awareness and providing
market research, networking, and professional development opportunities.
We also advocate on behalf of the industry to ensure sound public policy
that encourages a favourable investment environment. The CVCA works
alongside its members, who represent the vast majority of private
capital firms in Canada, to improve the industry and drive innovation
and growth. Please visit: http://www.cvca.ca.
CVCA Methodology
Venture Capital: dataset includes
verified completed equity or quasi-equity venture capital deals only.
Not included are non-equity based government funding such as grants from
FedDev, project financing from The SD Tech Fund of the Sustainable
Development Technology Canada (SDTC), pharmaceutical product development
deals, senior debt as part of overall financing package, venture
capital-backed acquisitions, and angel financing.
Private Equity: dataset includes only completed private equity deals for consistency and quarter-to-quarter/year-to-year comparison. Announced but yet to be completed deals are not included.
